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Full text of "Industrial relations : final report and testimony submitted to Congress by the Commission on Industrial Relations created by the act of August 23, 1912"

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San Francisco, California 


1st Session } SENATE j No> 415 





AUGUST 23, 1912 





[Public Resolution No. 15, Sixty-fourth Congress, first session.] 

Resolved by the Senate and House of Representatives of the United States of America in 
Congress assembled, That the final report of the United States Commission on Industrial 
Relations, including the report of Basil M. Manly, director of research and investiga- 
tion, and the individual reports and statements of the several commissioners, together 
with all the testimony taken at its hearings, except exhibits submitted in printed 
form, which shall be appropriately referred to in said testimony, be printed as a Senate 
document under the direction of the Joint Committee on Printing; and that ten thou- 
sand additional copies be printed and bound in cloth, of which two thousand five 
hundred copies shall be for the use of the Senate and seven thousand five hundred 
copies for the use of the House of Representatives; and that of the final report of said 
commission one hundred thousand additional copies be printed, of which thirty thou- 
sand copies shall be for the use of the Senate and seventy thousand copies for the 
use of the House of Representatives: Provided, That the superintendent of documents 
is hereby authorized to reprint copies of the same for sale or distribution as provided 
by law. 

Approved, April 28, 1916. 



Final report of commission (see special table of contents, pp. 7-8) 5-269 

Testimony taken .at hearings 271-1024 

Suggestions of expert witnesses 273-398 

J. D. Beck, member, Wisconsin Industrial Commission 278 

C. W. Price, assistant to the Industrial Commission of Wiscon- 
sin : 285 

R. W. Campbell, chairman, central safety -committee, Illinois 

Steel Co., Chicago 294 

W. H. Cameron, secretary, National Council of Safety 307 

Mrs. Raymond Bobbins, president, National Women's Trade- 
Union, League : 309 

John B. Andrews, secretary, American Association for Labor 

Legislation 319 

Herbert Quick, author and farmer 320 

Charles W. Holman, University of Texas 333 

John A. Fitch, industrial editor, "The .Survey" 334 

William M. Leiserson, deputy, Industrial Commission of Wis- 
consin 344 

F. C. Croxton, president, American Association of Free Public 

Employment Offices 357, 392 

Edward T. Devine, Columbia University _ : _ 358 

L. A. Halbert, superintendent, Kansas City Board of Public Wel- 
fare 360, 364 

James H. Boyd, ex-chairman, Employers' Liability Commission 

of Ohio 370 

Charles McCarthy, Legislative Reference Bureau of Wisconsin 377 

Meyer Bloomfield, director, Vocational Bureau of Boston 390 

Trade agreements in collective bargaining 399-761 

John Mitchell, member, New York State Workingmen's Com- 
pensation Commission.'; 401 

Francis S. Peabody, coal operator 428 

Frank J. Hayes, international vice president. United Miae Work- 
ers of America 449 

O. P. Briggs, ex-president, National Founders' Association- - 456,550 

Joseph F. Valentine, president, International Molders' Union 481 

Thomas J. Hogan, secretary Stove Founders' National Defense 

Association 510 

John P. Frey, executive officer and editor, International Mold- 
ers' Union 524 

Joseph Schaffner, secretary and treasurer, Hart, Schaffner & 

Marx, Chicago 564, 574 

Sidney Hillman, president, Cloak and Skirt Makers' Union, New 

York 1 566 

Earl Dean Howard, manager, labor department, Hart, Schaffner 

& Marx, Chicago 571, 592 

Julius Henry Cohen, counsel, Cloak,. Suit, and Skirt Manufac- 
turers' Protective Association 575, 587 

A. Bisno, chairman, educational committee, Cloak Makers' Union, 

New York 579 

James M. Lynch, commissioner of labor, State of New York 594 

Albert W. Finlay, chairman, executive committee, United Ty- 

pothetse of America 609 

George L. Berry, president, International Printing Pressmen and 

Assistants' Union 620 

Otto M. Eidlitz. general contractor, New York 644 



Testimony taken at hearings Continued. 

Trade agreements in collective bargaining Continued. Page. 

W. J. Spencer, building-trades department, American Federation 

of Labor 659 

Henry Struble, secretary, National Cut Stone Contractors' As- 
sociation 665 

Thomas J. Williams, president, building trades department, 

American Federation of Labor .. 675 

Edward A. Crane, architect, Philadelphia 681 

Charles Francis president, Printers' League of America 683 

J. E. Williams, mediator of labor disputes 697 

W. L. Mackenzie King, former minister of labor, Ottawa, Can- 
ada 713, 732 

Samuel Gompers, president, American Federation of Labor___ 718, 738 
James A. Emery, counsel, National Association of Manufac- 
turers 724, 745 

Exhibits, printing trades 748 

Exhibits, building trades 760 

Efficiency systems and labor 763-1024 

Frederick W. Taylor, consulting engineer, Philadelphia 765, 795 

John F. Tobin, president, Boot and Shoe Workers' Union, Boston- 810 
Harrington Emerson, standard of practice and efficiency engi- 
neer 822, 1021 

Charles W. Mixter, time-study man Sentinel Automatic Gas Ap- 
pliance Co., New Haven 835 

Robert G. Valentine, industrial counselor 852 

James M. Dodge, chairman, Link Belt Co., Philadelphia 862 

P. J. Conlon, vice president, International Association of Ma- 
chinists 873 

David Van Alstyne, assistant to president, New York, New Haven 

& Hartford Railroad 883 

Carl G. Earth, consulting engineer, Philadelphia 886 

A. J. Berres, secretary-treasurer, metal-trades department, Amer- 
ican Federation of Labor 899 

Sanford E. Thompson, consulting engineer, Boston 913, 928 

N. P. Alifas, president, district No. 44, International Association 

of Machinists 940 

Henry Lawrence Gantt, consulting engineer, Montclair, N. J 955 

James Duncan, president, Granite Cutters' International Associa- 
tion of America 965 

John Golden, president, United Textile Workers of America.. 985, 1012 
Louis D. Brandeis, counselor at law, Boston 991 







FRANK P. WALSH, Missouri, Chairman. 



RICHARD H. AISHTON, Illinois.! JAMES O'CONNELL, District of Columbia. 


LEWIS K. BROWN, Secretary' 


BASIL M. MANLY, Director of Research and Investigation. 



That a commission is hereby created to be called the Commission on Industrial 
Relations. Said commission shall be composed of nine persons, to be appointed 
by the President of the United States, by and with the advice and consent of the 
Senate, not less than three of whom shall be employers of labor and not less than 
three of whom shall be representatives of organized labor. 

# * * # * . * * 

SEC. 4. That the commission shall inquire into the general condition of labor in the 
principal industries of the United States, including agriculture, and especially in those 
which are carried on in corporate forms; into existing relations between employers 
and employees; into the effect of industrial conditions on public welfare and into 
the rights and powers of the community to deal therewith; into the conditions of 
sanitation and safety of employees and the provisions for protecting the life, limb, 
and health of the employees; into the growth of associations of employers and of wage 
earners and the effect of such associations upon the relations between employers and 
employees; into the extent and results of methods of collective bargaining; into any 
methods which have been tried in any State or in foreign countries for maintaining 
mutually satisfactory relations between employees and employers; into methods for 
avoiding or adjusting labor disputes through peaceful and conciliatory mediation and 
negotiations; into the scope, methods, and resources of existing bureaus of labor and 
into possible ways of increasing their usefulness; into the question of smuggling or 
other illegal entry of Asiatics into the United States or its insular possessions, and of 
the methods by which such Asiatics have gained and are gaining such admission, and 
shall report to Congress as speedily as possible, with such recommendation as said 
commission may think proper to prevent such smuggling and illegal entry. The com- 
mission shall seek to discover the underlying causes of dissatisfaction in the industrial 
situation and report its conclusions thereon. 

i Appointed commissioner Mar. 17, 1915, to serve the unexpired term of Hon. F. A. Delano, resigned. 



Letter of transmittal 9 



Letter of submittaL 

Introduction 17 

Method and character of investigation 19 

Classification of witnesses upon industrial subjects 20 

Summary of conclusions and recommendations 21-68 

Labor conditions in the principal industries, including agriculture 21 

Existing relations between employers and employees 25 

Causes of industrial unrest 29 

Unjust distribution of wealth and income 30 

Unemployment and denial of opportunity to earn a living 

Denial of justice 38 

Denial of the right of organization 61 

Conclusions and recommendations 68-152 

I. Industrial conditions of adult workmen in general industries 68 

Wages 68 

Hours of labor 69 

Safety and sanitation 69 

Housing 70 

II. Women and children in industry 71 

III. Industrial conditions and relations on public utilities 73 

General 73 

Telegraph 74 

Telephone 75 

The Pullman Co 76 

Eailroads , 77 

IV. Industrial conditions in isolated communities 78 

V. The concentration of wealth and influence 80 

VI. The land question and the condition of agricultural labor 86 

VII. Judicial settlement of labor claims and complaints 89 

VIII. The law relating to trade unions and industrial disputes 90 

IX. The policing ofindustry 92 

The origin of industrial violence 92 

State constabulary 97 

Free speech 98 

X. The conditions and problems of migratory laborers 101 

XI. Unemployment 103 

Extent and character of unemployment 103 

Existing conditions of employment 106 

Existing agencies for employment 108 

Public employment agencies 112 

XII. Organization, methods and policies of trade unions 115 

XIII. Organization, methods and policies of employers' associations 117 

XIV. Joint agreements 119 

XV. Agencies of mediation, investigation, and arbitration 120 

Proposed plan of a national system 121 

Organization 121 

Powers, duties, and jurisdiction 123 

Cooperation 124 

XVI. Industrial conditions and the public health Sickness insurance 124 

XVII Education in relation to industry. (See Report of Commissioner John B. Lennon 

on Industrial Education, p. 253) 127 

XVIII. Scientific management 127 

Possible benefits to labor and society 128 

Diversities and defects 129 

General labor problems 139 

Conclusions 143 

XIX. Prison labor -. 143 

XX. Immigration : 144 

XXI. Labor conditions in American colonial possessions 145 

XXII. Chinese exclusion '- 147 

Constructive suggestions: 

Changes in thelaw 147 

United States commissioners 149 

The judicial system 

General administration 149 

Selection of inspectors \ 

Chinese interpreters 150 

Staff organization at Washington - - - 150 

Salary plan 151 

Restricting 152 







Criticisms not justified 161 

Strong organizations the cure 162 

The evidence 162 

Extent of unrest 163 

New governmental machinery unwise 164 

The one true remedy 165 

The public's duty 166 



Enactment, interpretation, and enforcement of labor law 171 

Industrial commissions 173 

Advisory representative council 176 

Civil service and comments on preceding paragraphs 180 

Commissions and class conflicts 182 

Investigations 191 

Rules and regulations 195 

Review by commission 198 

Court review 199 

Testimony 200 

Continuous industry, employment and insurance 200 

Police and military 201 

Legal aid 202 

Legislation 203 

Supreme courts 204 

Mediation and minimum wage 206 

Trade disputes 214 

Foundations 220 

Subsidies 221 

Federalfund for social welfare 221 

Immigration 225 

Farmers and farm laborers 226 

Corporation eontrol 228 

Dissenting opinion of Commissioner Harris Weinstock 230 


Points of dissent 231 

Employers' objection to organized labor, fear of 

Sympathetic strikes 235 

Jurisdictional disputes 236 

Labor union politics 237 

Contract breaking 237 

Restriction of output 238 

Prohibition of use of nonunion-made tools and material 240 

Closed shop 240 

Contests for supremacy between rival unions 242 

Acts of violence 242 

Apprenticeship rules . 246 





Demand for industrial education 255 

Control of vocational schools 257 

General recommendations 258 

Continuation of part-time schools 259 

Teachers 260 

Conclusions 260 




Chicago, III., August 23, 1915. 
To the Sixty -fourth Congress: 

On behalf of the Commission on Industrial Relations, I have the 
honor to transmit herewith its final report. 

The assembling of facts in the report of the staff from the records 
of our public hearings and the reports of investigators, under the 
direction of Mr. Basil M. Manly, might well be taken, in my opinion, 
as a model of efficiency and scientific treatment by governmental 

The plan of submitting none but undisputed facts in the final 
report of the commission has been faithfully adhered to. 

No statement or conclusion of fact adverse to the attitude or in- 
terest of any person or group of persons is submitted, except as de- 
clared or assented to by the person or by the individuals comprising 
the group affected. Thus, for perhaps the first time in the history 
of our Government, the facts in relation to conditions in the indus- 
tries examined and the relations inquired into are placed beyond 
the realm of controversy and established upon the solid and scientific 
basis of ascertained and indisputable fact. 

It is believed that the work of the commission has been conducted 
in a spirit of social justice and an earnest desire to serve the public 
by bringing into the light the facts regarding the industrial relations 
of the country. For the creation of this spirit, as well as for an 
earnest insistence that the education of the public should be the key- 
note, I feel that full credit should be accorded Mr. George P. West, 
and that in addition thereto he should be credited with the inspira- 
tion and planning of many of the most effective public hearings of 
the commission. 


FRANK P. WALSH, Chairman. 


Report of Basil M. Manly 

Director of Research and Investigation 

Embodying the Findings of Fact, Conclusions, and Recommendations 

of the Staff, based upon their Investigations and the 

Testimony of Public Hearings 


Commissioners Walsh, Lennon, O'Connell, and Garretson 


Supplemental Statements by Chairman Walsh, Commission- 
ers Garretson, Lennon, and O'Connell 



CHICAGO, ILL., August 9, 1915. 


I have the honor to submit herewith my report, which has been 
prepared by direction of the commission as a summary and interpre- 
tation of the evidence contained in the public hearings of the com- 
mission and the reports of the staff, together with suggestions for 
action designed to remedy such evils and abuses as have been de- 
veloped by investigation. 

In the preparation of this report I have directed my attention 
primarily to the most important question placed before the commis- 
sion by Congress, namely, " the underlying causes of dissatisfaction 
in the industrial situation." I have, however, attempted to cover as 
adequately as possible all the questions embodied in section 4 of 
the act. 

A few words with regard to the method of preparation may be of 
value : The policy of the commission in intrusting certain important 
subjects to the members of the staff for investigation under the gen- 
eral supervision of the director has been continued throughout. The 
members of the staff who had charge of definite subjects have made 
their final reports embodying the results of their investigations and 
the pertinent parts of the testimony before the commission. These 
reports have, as far as possible, been accepted as the basis for the 
statements and recommendations contained in this report. It is only 
fair, however, to state that in certain respects they have been modi- 
fied, largely as a result of the discussion which took place when these 
reports were presented to the commission in tentative form. Never- 
theless, in every case the substance and essential ideas of each in- 
vestigator's report have been retained. 

The enormous mass of testimony heard by the commission has 
been drawn upon freely. In using this testimony I have iDeen guided 
by the principle of quoting only statements made by the party to 
whom such evidence would be unfavorable or by persons who were 
clearly nonpartisan. For example, in the criticism of the attitude 
and actions of employers only the testimony given by employers or 
their agents has been quoted ; the testimony of labor representatives 
being used only to show the attitude of the workers. 

In addition, I have utilized to a very large extent the reports of 
other governmental agencies, not only as sources of original informa- 
tion but as a check upon the statements and conclusions contained 
herein. In relation to a few subjects, indeed, the information al- 
ready collected made it unnecessary for the commission to conduct 
investigations of its own. 



This report should properly be known as the report of the staff, 
except that, as noted above, I feel it necessary to assume personal 
responsibility for certain modifications which have been made from 
the original reports. I wish to state, however, that I have drawn 
most largely upon the following reports, which are submitted here- 
with, with the suggestion that Congress be requested to print them 
as supplements to this report : x 


Analysis of Economic Causes of Unrest. 

Labor Conditions in American Industry. 

The Telephone and Telegraph Industry. 

Labor Conditions in Porto Rico, 

Women in Industry. 

Interstate Competition. 

Enforcement of Laws Regulating Working Hours of Women In Wisconsin. 

Labor Conditions in Colorado. 

Labor Conditions in the Black Hills. 

Labor Conditions in Los Angeles. 

Preliminary Report on the Land Question. 

Agricultural Labor and Tenancy. 


Conditions in Labor Camps. 

Labor Complaints and -Claims. 

Migratory Workers. 

Joint Agreements. 

Mediation and Arbitration. 

Extent and Growth of Labor Organizations. 

Trade-Union Law, 

Injunctions in Labor Disputes. 

Scientific Management and Labor. 

Industrial Conditions and the Public Health. 

Violence in Labor Disputes aod the Policing of Industry. 

The National Erectors' Association and the International Association of 

Bridge and Structural Iron Workers. 

The Inferior Courts and Police of Paterson, N. J. 

Chinese Exclusion. 

In addition to those named above, the following members of the 
staff, who have performed exceptional service and whose reports 
have to some extent been used directly, should be mentioned : Henry 
Wiiithrop Ballantine, Charles B. Barnes, Francis H. Bird, E. H. 

1 These reports have not heen printed with this document, on the recommendation of 
Chairman Frank P. Walsh, as stated in his letter in Senate Report No. 143, Sixty-fourth 
Congress. The reports on Labor Conditions in Colorado and the National Erectors' Asso- 
ciation were printed by the commission itself in 1915. 


Busiek, W. J. Coyne, Nelle B. Curry, Alexander M. Daly, F. S. 
Deibler, Noel T. Dowling, H. E. Hoagland, Carl Hookstadt, B. F. 
Moore, Daniel T. O'Regan, M. O'Sullivan, Selig Perlman, Sumner 
Slichter, George L. Sprague, and Inis Weed. 

Special mention should be made also of Charles J. Stowell and 
Elizabeth A. Hyde, whose work in research and in the digesting of 
testimony has been invaluable. 

The success of the public hearings was due in large measure to the 
courage, tact, and good humor of Thomas J. Egan, who performed 
the difficult duties of sergeant at arms for the commission. 
/ ' I wish to express my appreciation of the generous cooperation of 
the secretary, Mr. Lewis K. Brown, upon whose executive ability and 
tactful administration of the commission's affairs the work of the 
1 staff in large measure depended. I wish also to express to the com- 
, mission my acknowledgment and appreciation of the unusual free- 
dom which has been accorded me in the administration of the work 
of research and investigation, and in the conduct of the public 


BASH, M. MANLY, Director. 





The question of industrial relations assigned by Congress to the 
commission for investigation is more fundamental and of greater 
importance to the welfare of the Nation than any other question ex- 
cept the form of our government. The only hope for the solution 
of the tremendous problems created by industrial relationship lies 
in the effective use of our democratic institutions and in the rapid 
extension of the principles of democracy to industry. 

The immediate effects of the form and character of industrial or- 
ganization are, however, greater and closer to the lives and happi- 
ness of all classes of citizens than even the form and character of 
our political institutions. The ordinary man, whether employer 
or worker, has relatively little contact with the Government. If he 
and his family are well fed, well housed, and well clothed, and if he 
can pay for the education of his children, he can exist even under 
an autocratic monarchy with little concern, until some critical situa- 
tion develops in which his own liberty is interfered with or until he 
is deprived of life or property by the overwhelming power of his 
tyrannical ruler. But his industrial relations determine every day 
what he and his family shall eat, what they shall wear, how many 
hours of his life he shall labor and in what surroundings. Under 
certain conditions where his individual or corporate employer owns 
or controls the community in which he lives, the education of his 
children, the character and prices of his food, clothing, and house, 
his own actions, speech, and opinions, and in some cases even his 
religion, are controlled and determined, in so far as the interests of 
the employer make it desirable for him to exercise such control. 
Such conditions are established and maintained not only through the 
dictation of all working conditions by the employer, but by his 
usurpation or control of the functions and machinery of political 
government in such communities. 

In the available time it has been impossible to ascertain how gen- 
eral such conditions are, but it is clearly indicated by the investiga- 
tions that in isolated industrial, mining, or agricultural communi- 
ties, which are owned or controlled by single individuals or corpora- 
tions, and in which the employees are unorganized, industrial feu- 
dalism is the rule rather than the exception. 

38819 16 2 17 


In such communities democratic government does not, as a rule, 
exist, except in name or form, and as a consequence there now exist 
within the body of our Republic industrial communities which are 
virtually principalities, oppressive to those dependent upon them 
for a livelihood and a dreadful menace to the peace and welfare of 
the Nation. 

Such conditions as these are the direct and inevitable consequence 
of the industrial relations which exist in such communities. Politi- 
cal freedom can exist only where there is industrial freedom ; politi- 
cal democracy only where there is industrial democracy. 

Such industrial democracy has been established in a greater or 
less degree in certain American industries or for certain classes of 
employees. But .between conditions of industrial democracy and 
industrial feudalism there are almost infinite gradations marking 
the stages of evolution which have been reached. In every case, 
however, investigation has shown that the degree of political free- 
dom and democracy which exists is conditioned by the industrial 
status of the citizens who form the majority of the community. 

The problems of industrial relations, therefore, demand the atten- 
tion of Congress, not only because they' determine the life, security, 
and happiness of the 25,000,000 citizens of the United States who 
occupy the position of wage earners but because they affect for good 
or evil the government of localities and States and to a smaller de- 
gree that of the Nation itself. What each of these wage earners shall 
eat, what he shall wear, where he shall live, and how long and under 
what conditions he shall labor are determined by his industrial 
status and by his relation, individually or collectively, to the person 
or corporation employing him. Similarly and almost as directly, 
this relationship determines whether the machinery of government 
shall be used for or against his welfare ; whether his vote shall count 
for or against his own interest ; whether he shall be tried by a jury 
of his peers or a jury selected in collusion with the employing com- 
pany, or, under conditions of so-called martial law, by no jury what- 
ever ; whether, in fact, he shall be a free man or be deprived of every 
right guaranteed by Federal and State constitutions, imprisoned 
without warrant for the commission of crimes of which he may be 
innocent or forcibly deported from the community or State in which 
he has made his home. For these reasons it seems desirable at the 
outset to suggest a recommendation to Congress that these problems 
of industrial relationship should occupy their due prominence in the 
deliberations of that honorable body, and that the entire machinery 
of the Federal Government should be utilized to the greatest possible 
degree for the correction of such deplorable conditions as have been 
found to exist. 

The lack of a proper industrial relationship and the existence of 
bad labor conditions is a matter of the most serious moment during 
times of peace, but the events of the past year have demonstrated 
how enormously their menace to the welfare of a nation is increased 
during a period of war. The present European war is being fought 
on the farms and in the factories as much as in the trenches. The 
effective mobilization of our industrial resources is as important, 
simply from the standpoint of war, as is the mobilization of our mil- 
itary and naval forces. 


It is equally important that action should be taken now, and not 
after war is a reality. 

An attempt has been made in the succeeding pages of this report 
to suggest some of the measures which should be adopted, with a full 
realization, however, that no action will be effective which does not 
come through an understanding by the American people of the essen- 
tial facts regarding industrial conditions. Practically there are only 
two alternatives for effective action: First, the creation of a huge 
system of bureaucratic paternalism such as has been developed in 
Germany ; second, action which removes the many existing obstacles 
which prevent effective organization and cooperation, reserving for 
performance by the Government only those services which can not be 
effectively conducted by voluntary organizations and those which 
are of such vital importance to the entire Nation that they should 
not be left to the hazard of private enterprise. 

In closing this introductory statement it is proper to append a 
quotation from Carlyle, the great Scotch historian, which contains 
in a few eloquent sentences the very heart of the situation in Ameri- 
can industry : 

With the working people, again, it is not so well. Unlucky ! For there are 
from twenty to twenty-five millions of them. Whom, however, we lump together 
into a kind of dim compendious unity, * * *, as " the masses." Masses 
indeed; and yet, singular to say, the masses consist of units, * * *, every 
unit of whom has his own heart and sorrows ; stands covered there with his own 
skin, and if you prick him he will bleed. Every unit of these masses is a mirac- 
ulous man, even as thou thyself art ; struggling with vision or with blindness for 
his infinite kingdom (this life which he has got once only in the middle of 
eternities) ; with a spark of the divinity, what thou callest an immortal soul, 
in him! 

Clearly a difficult " point " for government, that of dealing with these masses ; 
if indeed it be not rather the sole point and problem of government, and all 
other points mere accidental crotchets, superficialities, and beatings of the 
wind ! For let charter chests, use and wont, law common and special, say what 
they will, the masses count to so many millions of units, made, to all appear- 
ance, by God, whose earth this is declared to be. 


In the investigation of questions so intimately affecting the lives 
of a large part of the American people the ordinary methods of 
compiling facts and drawing deductions would have been utterly 
insufficient, not only because the ground to be covered was too ex- 
tensive, but because the situation was too largely the result of the 
opinions, beliefs, and convictions of employers and employees to be 
susceptible of ascertainment by such a method. Furthermore, it 
became clear very early in the investigation that the problems which 
were presented could be solved only by the will arid conscience of 
the American people acting either directly or through their repre- 
sentatives in the State and Federal Governments. 

The commission has therefore called before it witnesses represent- 
ing persons drawn from almost every walk of life, whose knowledge 
and opinions were believed to be of value. In order that the informa- 
tion developed by these hearings should reach the people they were 
not only held in public, but, through the newspapers, the facts de- 
veloped by them have been carried throughout the Nation. 

These hearings have occupied in all 154 days, or rather more than 
the equivalent of 6 months of the commission's time. One or more 


hearings were held in each of the following cities: Washington, 
New York, Paterson, Philadelphia, Boston, Chicago, Lead (S. Dak.)? 
Butte, Seattle, Portland, San Francisco, Los Angeles, Denver, and 
Dallas. The witnesses, however, were by no means limited to these 
localities, but in every case the best-informed persons were brought 
to the centers at which the hearings were held. 

The representative character of the witnesses may best be shown by 
the statement on the following page. 

Classification of ivitnesses upon industrial subjects. 

Affiliated with employers : 

Employers, managers, foremen, etc 

Representatives of employers' organizations 

Attorneys 15 

Efficiency engineers 10 

Employment agents 

Capitalists, bankers, directors, etc 20 


Affiliated with labor : 

Trades-union officials 135 

Workingmen and working women 90 

Attorneys 6 

Industrial Workers of the World 8 

Representatives of the Socialist Party G 


Not affiliated with either group: 

Agriculturists 22 

Attorneys 15 

Public officials 69 

Representatives of civic organizations 

Educators 22 

Economists and sociologists 20 

Investigators 11 

Representatives of the press 14 

Clergy 10 

Physicians 7 

Unclassified 17 

On Chinese exclusion 84 


Total 740 

These witnesses were not arbitrarily selected by the commission, 
but were chosen only after careful investigation by agents of the com- 
mission, who consulted the persons best informed regarding the 
industry, locality, or question under consideration. Every oppor- 
tunity was given employers and employees to suggest the names of 
witnesses who could best present their side of the case, and the per- 
sons thus suggested were without exception heard with absolute free- 
dom not only as regards time, but without regard to the technical 
rules of evidence. 

It seems desirable also to call attention to the fact that in this 
report, except for citations from admittedly nonpartisan official 
bodies, there are no statements of fact affecting any person or group 
of persons which have not been submitted to the parties directly 
concerned, or which have not been quoted from documents submitted 
by them or from their public testimony. The submission of the facts 
developed by preliminary investigation to the parties affected for 
verification or correction at public hearings is believed to be the best 
means of ascertaining the truth and avoiding evasion. The same is 


true of the recommendations and conclusions contained in the report, 
a very large number of which were submitted for criticism at public 
hearings or by correspondence. 


In the act of Congress creating the commission, section 4 named 
11 questions into which inquiry was specifically directed. Of these 
questions three, relating to industrial conditions, industrial relations, 
and the causes of industrial unrest, were fundamental in character 
and of broad scope, while eight were specific and dealt more largely 
with matters of detail. Leaving these eight specific questions for 
detailed consideration in the body of the report, it seems desirable 
to present briefly at this point the findings and conclusions with re- 
gard to these general questions. 



In considering the conditions of labor in American industries, it 
has seemed that they could be judged or appraised only by com- 
paring conditions as they actually exist with what knowledge and 
experience shows that they might easily be made during the im-> 
mediate future if proper action were taken to utilize the resources 
of our Nation efficiently and distribute the products equitably. 

As against this view there has been an attempt by some persons 
to urge the judgment of all things by comparison with the past. 
Much stress has been laid by certain witnesses upon the alleged im- 
provement of the condition of the workers during the past quarter 

This point, however, is regarded as generally immaterial. The 
crux of the question rather is, Have the workers received a fair 
share of the enormous increase in wealth which has taken place in 
this country, during the period, as a result largely of their labors? 
The answer is emphatically, No ! 

The wealth of the country between 1890 and 1912 increased from 
sixty-five to one hundred and eighty-seven billions, or 188 per cent, 
whereas the aggregate income of wage earners in manufacturing, 
mining, and transportation has risen between 1889 and 1909 only 95 
per cent, from two thousand five hundred and sixteen millions in 
1889 to four thousand nine hundred and sixteen millions in 1909. 
Furthermore, the wage earners' share of the net product 1 of in- 
dustry in the case of manufactures was only 40.2 per cent in 1909, 
as compared with 44.9 per cent in 1889. 

Similarly, the attempt to dismiss deplorable labor conditions in 
the United States by arguments that they are better than in Euro- 
pean countries is repugnant. To say that conditions are better than 
in Great Britain, for example, is simply to say that somewhat less 
than one-third of the population is in a state of absolute poverty, 
for that was the condition reported by the latest British commission 
It should be a matter of shame also to boast that the condition of 

1 The net product is the value that remains after subtracting the cost of materials from 
the total value. 


American laborers is better than that of laborers in the " black bread 
belt " of Germany. 

That conditions are, as a matter of fact, but little better is proved 
conclusively by the almost complete cessation of immigration from 
Germany, England, and France. No better proof of the miserable 
condition of the mass of American workers need be sought than the 
fact that in recent years laborers in large numbers have come to 
this country only from Russia, Italy, Austria-Hungary, and the 
backward and impoverished nations of southern and eastern Europe* 

With the inexhaustible natural resources of the United States, her 
tremendous mechanical achievements, and the genius of her people 
for organization and industry, there can be no natural reason to pre- 
vent every able-bodied man of our present population from being 
well fed, well housed, comfortably clothed, and from rearing a 
family of moderate size in comfort, health, and security. How far 
this ideal is actually achieved is discussed in some detail in the fol- 
lowing pages. 

It is evident both from the investigations of this commission and 
from the reports of all recent governmental bodies that a large part 
of our industrial population are, as a result of the combination of low 
wages and unemployment, living in a condition of actual poverty. 
How large this proportion is can not be exactly determined, but it 
is certain that at least one-third and possibly one-half of the families 
of wage earners employed in manufacturing and mining earn in the 
course of the year less than enough to support them in anything like 
a comfortable and decent condition. The detailed evidence is pre- 
sented in a separate report which is submitted for transmittal to 
Congress. 1 At this point it is sufficient to call attention to the results 
of the most exhaustive and sweeping official investigation of recent 
years, that of the Immigration Commission, which reported to Con- 
gress in 1909, This investigation secured detailed information re- 
garding the daily or weekly earnings of 619,595 employees of all 
classes in our basic manufacturing industries and in coal mining, 
and information regarding income and living conditions for 15,726 

It was found that the incomes of almost two-thirds of these fam- 
ilies (64 per cent) were less than $750 per year and of almost one- 
third (31 per cent) were less than $500, the average for all being 
$721. The average size of these families was 5.6 members. Elab- 
orate studies of the cost of living made in all parts of the country 
at the same time have shown that the very least that a family of five 
persons can live upon in anything approaching decency is $700. It is 
probable that, owing to the fact that the families investigated by the 
Immigration Commission were, to a large extent, foreign born, the 
incomes reported are lower than the average for the entire working 
population ; nevertheless, even when every allowance is made for that 
fact, the figures show conclusively that between one-half and two- 
thirds of these families were living below the standards of decent 
subsistence, while about one-third were living in a state which can 
be described only as abject poverty. 

American society was founded and for a long period existed upon 
the theory that the family should derive its support from the earn- 

1 Report of Edgar Sydenstricker : Labor Conditions in American Industries. 


ings of the father. How far we have departed from this condition 
is shown by the fact that 79 per cent of the fathers of these families 
earned less than $700 per year. In brief, only one-fourth of these 
fathers could have supported their families on the barest subsist- 
ence level without the earnings of other members of the family or 
income from outside sources. 

Other facts collected in this investigation show conclusively Jbhat 
a very large proportion of these families did not live in decency 
and comfort. Thirty per cent kept boarders and lodgers, a condition 
repugnant to every ideal of American family life, especially in the 
crowded tenements or tiny cottages in which the wage earners of 
America characteristically live. Furthermore, in 77 per cent of the 
families two or more persons occupied each sleeping room, in 37 per 
cent three or more persons, and in 15 per cent four or more persons. 

The most striking evidence of poverty is the proportion of pauper 
burials. Th repugnance of all classes of wage earners of all races 
to pauper burial is such that everything will be sacrificed and heavy 
debts incurred rather than permit any member of the family to lie 
in the " potter's field " ; nevertheless in New York City 1 out of every 
12 corpses is buried at the expense of the city or turned over to 
physicians for dissection. 1 

The terrible effects of such poverty may be outlined in a few para- 
graphs, but their far-reaching consequences could not be adequately 
shown in a volume. 

Children are the basis of the State; as they live or die, as they 
thrive or are ill nourished, as they are intelligent or ignorant, so 
fares the State. How do the children of American workers fare ? 

It has been proved by studies here and abroad that there is a 
direct relation between poverty and the death rate of babies; but 
the frightful rate at which poverty kills was not known, at least for 
this country, until very recently," when through a study made in 
Johnstown, Pa., by the Federal Children's Bureau, it was shown that 
the babies whose fathers earned less than $10 per week died during 
the first year at the appalling rate of 256 per 1,000. On the other 
hand, those whose fathers earned $25 per week or more died at the 
rate of only 84 per 1,000. The babies of the poor died at three times 
the rate of those who were in fairly well-to-do families. The tremen- 
dous significance of these figures will be appreciated when it is known 
that one- third of all the adult workmen reported by the Immigration 
Commission earned less than $10 per week, even exclusive of time 
lost. On the showing of Johnstown these workmen may expect one 
out of four of their babies to die during the first year of life. 

The last of the family to go hungry are the children, yet statistics 
show that in six of our largest cities from 12 to 20 per cent of the 
children are noticeably underfed and ill nourished. 

The minimum amount of education which any child should receive 
is certainly the grammar school course, yet statistics show that only 
one-third of the children in our public schools complete the grammar 
school course, and less than 10 per cent finish high school. 2 Those 

1 Statistics for New York are the only ones available which are reasonably complete. 
Even there not all are included who die in a state of extreme poverty, as it is well known 
that national societies and sympathetic individuals claim a large number of bodies of 
persons absolutely unknown to them. 

8 Elimination of Pupils from School. Edward L. Thorndike. Bull. 379, TJ. S. Bureau of 


who leave are almost entirely the children of the workers, who, as 
soon as they reach working age, are thrown, immature, ill trained, 
and with no practical knowledge, into the complexities of industrial 
life. In each of four industrial towns studied by the Bureau of 
Labor Statistics, more than 75 per cent of the children quit school 
before reaching the seventh grade. 1 

Tlje great seriousness of this condition is even more acutely realized 
when it is known that in the families of the workers 37 per cent of 
the mothers are at work 2 and consequently unable to give the chil- 
dren more than scant attention. Of these mothers 30 per cent keep 
boarders and lodgers and 7 per cent work outside the home. 

As a final statement of the far-reaching effects of the economic 
condition of American wage earners, it seems proper to quote the 
following statement of the Chicago Commission on Crime, which 
after thorough investigation, has reported during the past year : 

The pressure of economic conditions has an enormous influence in producing 
certain types of crime. Insanitary housing and working conditions, unemploy- 
ment, wages inadequate to maintain a human standard of living, inevitably 
produce the crushed or distorted bodies and minds from which the army of 
crime is recruited. The crime problem is not merely a question of police and 
courts; it leads to the broader problems of public sanitation, education, home 
care, a living wage, and industrial democracy. 8 

The other factors in the conditions under which labor is employed 
in American industry, such as working hours, regularity of employ- 
ment, safety, and sanitation, are left for later discussion. Suffice 
it to say in this connection that while in certain fields great improve- 
ments have been made, the general situation is such that they accen- 
tuate rather than relieve the deplorable effects of inadequate income 
which have been pointed out. 

As a picture of American industry, this presentation is undeniably 
gloomy and depressing, but as a diagnosis of what is wrong with 
American labor conditions, it is true and exact. There are, of course, 
many bright spots in American industry, where workmen are well 
paid and regularly employed under good working conditions in 
the determination of which they have some share. But, even as the 
physician pays little attention to the good eyes and sound teeth of 
a patient whose vital organs are diseased, so impressive is the urgent 
need for attention to the diseased spots in industry, it is felt to be 
unnecessary to waste time in word pictures of conditions which are 
all right or which may be depended upon to right themselves. 

In agriculture there is no array of exact figures which can be quoted 
to show the condition of labor. But, speaking generally, 'the available 
evidence indicates clearly that while in some sections agricultural 
laborers are well paid and fairly treated, the condition of the mass is 
very much like that of the industrial workers. 

Moreover, there is a peculiar condition in agriculture which merits 
a brief but strong statement at this point as a preface to a more de- 
tailed discussion later. The most alarming fact in American agri- 
culture is the rapid growth of tenancy. In 1910 there were 37 tenant - 

1 Conditions Under Which Children Leave School to Go to Work. Vol. VII of Report on 
Conditions of Woman and Child Wage Earners in the United States. S. Doc. No. 645, 61st 
Cong., 2d sess. 

2 Summary Report on Immigrants in Manufacturing and Mining. Vols. 19 and 20 of 
Reports of the Immigration Commission. S. Doc. No. 633, 61st Cong., 2d sess. 

Report of the City Council Committee on Crime, Chicago, Summary of Findings, sec. 14, 
p. 12. 


operated farms in each 100 farms in the United States, as compared 
with 28 in 1890, an increase of 32 per cent during 20 years. No 
nation-wide investigation of the condition of tenant farmers has ever 
been made, but in Texas, where the investigations of this commission 
were thorough and conclusive, it was found not only that the economic 
condition of the tenant was extremely bad but that he was far from 
being free, while his future was regarded as hopeless. Badly housed, 
ill nourished, uneducated, and hopeless, these tenants continue year 
after year to eke out a bare living, moving frequently from one farm 
to another in the hope that something will turn up. Without a large 
family the tenant can not^hope to succeed or break even, so in each 
tenant family numerous children are being reared to a future which 
under present conditions will be no better than that of their parents, 
if as good. The wife of a typical tenant farmer, the mother of 11 
children, stated in her testimony before the commission that in addi- 
tion to the rearing of children, making their clothes, and doing the 
work of the house, she always helped with the crops, working up to 
within three or four months before children were born, and that 
during all the years of her married life she had had no ready-made 
dresses and only three hats. The investigations of this commission 
in that rich and generally prosperous section of the country only con- 
firm and accentuate the statements of the Federal Industrial Com- 
mission which reported in 1902 : 

The result of this system [share tenancy] is that the renters rarely if ever 
succeed in laying by a surplus. On the contrary, their experiences are so dis- 
couraging that they seldom remain on the same farm for more than a year. 
They are not only unable to lay by any money, but their children remain un- 
educated and half clothed. The system is apparently one of the most undesira- 
ble, so far as its effect on the community is concerned. 1 

Similarly, the Public Lands Commission reported in 1905 : 

There exists and is spreading in the West a tenant or hired labor system 
which not only represents a relatively low industrial development, but whose 
further development carries with it a most serious threat. Politically, socially, 
and economically this system is indefensible. 

The condition of agricultural laborers can not, however, be dis- 
missed without referring to the development of huge estates which 
are operated by managers with hired labor on what may properly 
be called a " factory system." The conditions upon such estates are 
deplorable, not only because of the extremely low wages paid (80 
cents per day in the case of one which was carefully investigated), 
but even more because these estates, embracing within their bound- 
aries entire counties and towns, are a law unto themselves and the 
absolute dictators of the lives, liberties, and happiness of their em- 
ployees. It is industrial feudalism in an extreme form. Such estates 
are, as a rule, the property of absentee landlords, who are for the 
most part millionaires, resident in the eastern States or in Europe. 


Considering the whole field of American industry, there are almost 
infinite variations of relationship between employers and employees, 
ranging from the individual worker hired by a single employer, as 

1 Reports of the Industrial Commission, Vol. XIX, 1902, p. 98. 


in domestic service and agriculture, to the huge corporation with 
a hundred thousand stockholders and a quarter of a million em- 
ployees. Relationship varies from that of direct contact to a situa- 
tion where the employee, together with thousands of his fellow 
workers, is separated by hundreds of miles from the individuals 
who finally control his employment and of whose existence he is 
usually entirely ignorant. 

A thorough discussion of the relationships which exist under these 
various forms of industrial organization would be not only tedious, 
but useless for all practical purposes. The typical form of industrial 
organization is the corporation. In transportation approximately 
100 per cent of the wage earners are employed by corporations; in 
mining, 90 per cent; and in manufacturing, 75 per cent. Moreover, 
it is under this form that the great problems of industrial relations 
have developed. 

The actual relationship which exists between employers and em- 
ployees under the artificial conditions which characterize the cor- 
porate form of organization can not be understood without an 
analysis of the powers, functions, and responsibilities of the different 
elements which go to make up the typical corporation. The actual 
ownership of a corporation is vested in the stockholders and bond- 
holders, whose only interest in the industry is represented by cer- 
tificates upon the basis of which they expect the payment of interest 
or dividends at stated intervals. 

The control of the property, as far as operation is concerned, rests 
finally with the stockholders, or with some particular class of 
stockholders whose shares entitle them to vote. The stockholders, 
however, act through the board of directors, who are usually elected 
in such a way that they represent only the dominant interest. 1 As 
far as the organization of the corporation is concerned, the prin- 
cipal function of the board of directors is to select the executive 
officials. These executive officials, either directly or indirectly, select 
the numerous superintendents, foremen, and petty bosses by whom 
the direct operation of the enterprise is managed and through whom 
all the workers are hired, discharged, and disciplined. 

This is a skeleton of corporate organization. To understand its 
operations it is necessary to examine the functions and responsibili- 
ties of the different parts of the organization. 

Theoretically and legally, the final control and responsibility rests 
with the stockholders, but in actual practice a very different situa- 
tion is found. The relationship of stockholders to a corporation is 
anything but permanent : in a busy week on Wall Street the number 
of shares bought and sold in one of the great corporations will 
greatly exceed the total number of shares that are in existence. The 
stockholders as a class, therefore, have no guiding interests in the 
permanent efficiency of the corporation as regards either the preser- 
vation of its physical property or the maintenance of an efficient 
productive organization. Stocks are bought either as a speculation 
or as an investment, and in case either the physical property deteri- 
orates or the productive organization tends to become inefficient, the 
well-informed stockholder generally takes no steps to correct the 

1 See the testimony of Mr. Jacob H. Schiff, Mr. Samuel Untermyer, and others upon thU 


condition, but merely throws his stock upon the market. This marks 
a very real and definite distinction from the actual ownership of a 
property or business which must be kept in good condition by its 
owner as regards b8th plant and organization. If all industries were 
owned and operated by individuals, there might be some reason to 
hope that generally satisfactory wages and physical conditions might 
be attained through the education of the owner to a realization 
th#t permanent success depended absolutely upon the maintenance 
of the plant in the best condition and the permanent satisfaction of 
the legitimate demands of the workers, but with the impersonal, re- 
mote, and irresponsible status of control by stock ownership, such 
a hope must be purely illusory. The ordinary stockholder in a 
large corporation actually occupies a less direct relationship to the 
corporation in which he is interested, has less knowledge of its actual 
operations, and less control over its management than the ordinary 
citizen has over local, State, and National Governments. 

Boards of directors in theory are responsible for and would natur- 
ally be expected to maintain supervision over every phase of the 
corporation's management, but, as a matter of fact, we know that 
such supervision is maintained only over the financial phase of the 
business, controlling the acquisition of money to operate the busi- 
ness and distributing the profits. Actual direction generally exists 
only through the removal of executive officials who fail to deliver the 
expected profits, and through the appointment of their successors. 1 

Upon the testimony of financiers representing, as directors, hun- 
dreds of corporations, the typical director of large corporations is not 
only totally ignorant of the actual operations of such corporations, 
whose properties he seldom, if ever, visits, but feels and exercises no 
responsibility for anything beyond the financial condition and the 
selection of executive officials. Upon their own statements, these 
directors know nothing and care nothing about the quality of the 
product, the condition and treatment of the workers from whose 
labor they derive their income, nor the general management of the 
business. 2 

As far as operation and actual management are concerned, the 
executive officials are practically supreme. Upon their orders pro- 
duction is increased or decreased, plants are operated or shut down, 
and upon their recommendations wages are raised or lowered. But 
even they have little direct contact with the actual establishment of 
working conditions, and no relation at all with the rank and file of 
the workers. They act upon the recommendations of superintend- 
ents, whose information comes from their assistants and foremen, and 
from the elaborate statistics of modern business, which account for 
every piece of material and product, show the disposition of every 
penny that comes and goes, but ignore as though they did not exist 
the men and women whose labor drives the whole mechanism of 

Here, then, is the field of industrial relations: Masses of workers 
on the one side dealing in some manner with foremen and super- 
intendents on the other, behind whom is an organization of execu- 

1 See especially the testimony of Messrs. J. P. Morgan, John D. Rockefeller, jr., and 
August Belinont upon this point. 

* See the testimony of Messrs. Jacob H. Schiff, Daniel Guggenheim, Roger W. Babson, 
and John D. Rockefeller, jr. 


tive officials, representing in turn the board of directors, who are the 
chosen representatives of the stockholders. 

The crux of the whole question of industrial relations is: Shall 
the workers for the protection of their interests be organized and 
represented collectively by their chosen delegates, even as the stock- 
holders are represented by their directors and by the various grades 
of executive officials and bosses? 

In considering this issue the first question that presents itself is, 
Why should such representation be demanded as a necessity? Not 
only are the executive officials, superintendents and bosses, some wit- 
nesses have urged before the commission, for the most part humane 
and well-intentioned men, but they know that the interests of the 
business depend upon the welfare of the workers and, if unhindered, 
will pay the best wages and create the best working conditions that 
the business can afford. Organization and representation are there- 
fore argued to be unnecessary and tending only to promote friction 
and interfere with the management of the business. 

Let us grant the high character and good intentions of officials 
and consider the statement of the workers in reply. 

They say that in modern corporate business the actions of officials 
are governed not by their personal intentions, but by the inexorable 
demands for interest and dividends, and are driven not by their de- 
sire to create a permanently successful business with a contented 
labor force, but by the never-relaxed spur of the comparative cost 
sheet. The constant demand is for high production at low cost, not 
through improvements and good conditions which might give them 
next year, but this very month. In the high pressure of business 
every superintendent knows that if his plant is at the bottom of the 
comparative scale for two months his position topples, and if for 
three months it is virtually gone. He can not afford to experiment 
with changes that will not give immediate results. If he were his 
own master he might take a chance, knowing that the loss of this 
year would be compensated by gains under better conditions next 
year, but the monthly cost sheet does not wait for next year; it de- 
mands results now. 

But it may be said that if he can not improve conditions himself 
he can at least recommend them to his superiors, to be transmitted 
to the board of directors for approval. This might indeed be done, 
and with the extension of an understanding among managers that low- 
production costs may be secured with high wages, probably would be to 
an increasing extent, except that boards of directors scorn such ab- 
stractions as the high-wage-low-cost theory and habitually insist that 
managers shall buy labor, as they buy material, in the cheapest mar- 
ket. Moreover, raising wages is traditionally unpopular among 
stockholders and directors, and recommendations for better condi- 
tions, particularly if they involve new capital, are frowned upon. 1 
Neither the stockholders nor the directors have to live on wages or 
work in the existing surroundings, and profits deferred are con- 
sidered profits lost. 

The workers, therefore, deny the potency of even good intentions 
on the part of managers and point to labor history, which they 

1 See the discussion in the 1915 stockholders' meeting of the United States Steel Corpo- 
ration which was devoted almost exclusively to the question whether the corporation, at an 
expense of a few thousand dollars, should continue to send a copy of the annual report to 
each stockholder of record. 


allege shows that at best only isolated cases can be pointed out 
where marked improvements have taken place except in response to 
repeated demands from the workers or to forestall the growth of 
threatened organization. They point also to such facts as that chil- 
dren of 12 years or younger were not only employed in the factories 
(as they still are in some States where there has been little aggressive 
agitation), but almost without exception were insisted upon by the 
employers as a necessity. 

The evidence of this character, which is summarized elsewhere, 
seems to be conclusive of the necessity for organization and repre- 
sentation under modern business conditions. But even if it were not 
necessary it is difficult to see any reason why what is demanded and 
required by stockholders should be denied to workers. It would be 
as illogical for stockholders individually to attempt to deal with the 
representatives of the unions as it is for the individual worker to 
attempt to deal with executive officials representing the organized 


It is presumed that Congress had in mind, in directing the commis- 
sion to inquire into the "causes of dissatisfaction in the industrial 
situation," something far different from that " dissatisfaction with 
the present which is the hope of the future," that desire for better 
things which drives men forever forward. Such dissatisfaction is 
the mainspring of all progress and is to be desired in every nation 
in all walks of life. 

It is believed that Congress intended the inquiry to be directed to 
that unrest and dissatisfaction which grows out of the existence of 
intolerable industrial conditions and which, if unrelieved, will in the 
natural course of events rise into active revolt or, if forcibly sup- 
pressed, sink into sullen hatred. 

Of the existence of such unrest ample evidence has been found. 
It is the basis of the establishment and growth of the I. W. W., whose 
card-carrying members number only a few thousands, but which as 
" a spirit and a vocabulary " permeates to a large extent enormous 
masses of workers, particularly among the unskilled and migratory 
laborers. But entirely apart from those who accept its philosophy 
and creed, there are numberless thousands of workers, skilled and 
unskilled, organized and unorganized, who feel bitterly that they 
and their fellows are being denied justice, economically, politically, 
and legally. Just how widespread this feeling is or whether there 
is imminent danger of a quickening into active, nation-wide revolt, 
none can say. But no one who reads the papers from which the 
workers get their ideas and inspiration ; no one who has studied with 
care the history of such strikes as those at Lawrence and Paterson, 
in West Virginia and Colorado, and has understood the temper of 
the strikers ; no one who has associated with large numbers of work- 
ers in any part of the country, can fail to be impressed by the gravity 
of the situation. , 

This sense of tension and impending danger has been expressed by 
numerous witnesses before the commission, but by none more forcibly 
than by Mr. Daniel Guggenheim, a capitalist whose interests in mines 
and industrial plants extend to every part of the country. 


Chairman WALSH. What do you think has been accomplished by the philan- 
thropic activities of the country in reducing suffering and want among the 

Mr. GUGGENHEIM. There has a great deal been done. If it were not for what 
has been done and what is being done, we would have revolution in this 

The sources from which this unrest springs are, when stated in full 
detail, almost numberless. But upon careful analysis of their real 
character they will be found to group themselves almost without 
exception under four main sources which include all the others. 
The four are : 

1. Unjust distribution of wealth and income. 

2. Unemployment and denial of an opportunity to earn a living. 

3. Denial of justice in the creation, in the adjudication, and in 
the administration of law. 

4. Denial of the right and opportunity to form effective organi- 


The conviction that the wealth of the country and the income 
which is produced through the toil of the workers is distributed 
without regard to any standard of justice is as widespread as it is 
deep-seated. It is found among all classes of workers and takes every 
form from the dumb resentment of the day laborer, who, at the end of 
a week's back-breaking toil finds that he has less than enough to feed 
his family while others who have done nothing live in ease, to the 
elaborate philosophy of the " soap-box orator," who can quote statistics 
unendingly to demonstrate his contentions. At bottom, though, 
there is the one fundamental, controlling idea that income should be 
received for service and for service only, whereas, in fact, it bears 
no such relation, rand he who serves least, or not at all, may receive 

This idea has never been expressed more clearly than in the testi- 
mony of Mr. John H. Walker, president of the Illinois State Fed- 
eration of Labor : 

- A workingman is not supposed to ask anything more than a fair day's wage 
for a fair day's work ; he is supposed to work until he is pretty fairly tuckered 
out, say eight hours, and when he does a fair day's work he is not supposed 
to ask for any more wages than enough to support his family, while with the 
business man the amount of labor furnishes no criterion for the amount they 
receive. People accept it as all right if they do not do any work at all, and 
accept it as all right that they get as much money as they can; in fact, they 
are given credit for getting the greatest amount of money with the least 
amount of work; and those things that are being accepted by the other side 
as the things that govern in every-day life, and as being right, have brought 
about this condition, this being in my judgment absolutely unfair; that is, 
on the merits of the proposition in dealing with the workers. 

The workers feel this, some unconsciously and some consciously, but all of 
them feel it, and it makes for unrest, in my judgment, and there can be no peace 
while that condition obtains. 

In the highest paid occupations among wage earners, such as 
railroad engineers and conductors, glass blowers, certain steel-mill 
employees, and a few of the building trades, the incomes will range 
from $1,500 to $2,000 at best, ignoring a few exceptional men who 
are paid for personal qualities. Such an income means, under pres- 
ent-day conditions, a fair living for a family of moderate size, edu- 
cation of the children through high school, a small insurance policy, 


a bit put by for a rainy day and nothing more. With unusual re- 
sponsibilities or misfortunes, it is too little, and the pinch of neces- 
sity is keenly felt. To attain such wages, moreover, means that the 
worker must be far above the average, either in skill, physical 
strength, or reliability. He must also have served an apprenticeship 
equal in length to a professional course. Finally, and most im- 
portant, he or his predecessors in the trade must have waged a long, 
aggressive fight for better wages, for there are other occupations 
whose demand for skill, strength, and reliability are almost as great 
as those mentioned, where the wages are very much less. 

These occupations, however, include but a handful compared to 
the mass of the workers. What do the millions get for their toil, 
for their skill, for the risk of life and limb? That is the question 
to be faced in an industrial nation, for these millions are the back- 
bone and sinew of the State, in peace or in war. 

First, with regard to the adult workmen, the fathers and potential 
fathers, from whose earnings, according to the " American standard," 
the support of the family is supposed to be derived. 

Between one-fourth and one-third of the male workers 18 years 
of age and over, in factories and mines, earn less than $10 per week ; 
from two-thirds to three-fourths earn less than $15, and only about 
one-tenth earn more than $20 a week. This does not take into con- 
sideration lost working time for any cause. 

Next are the women, the most portentously growing factor in the 
labor force, whose wages are important, not only for their own sup- 
port or as the supplement of the meager earnings of their fathers 
und husbands, but because, through the force of competition in a 
rapidly extending field, they threaten the whole basis of the wage 
scale. From two-thirds to three-fourths of the women workers in 
factories, stores and laundries, and in industrial occupations gen- 
erally, work at wages of less than $8 a week. Approximately one- 
fifth earn less than $4 and nearly one-half earn less than $6 a week. 

Six dollars a week what does it mean to many? Three theater 
ticketSj gasoline for the week, or the price of a dinner for two; a 
pair of shoes, three pairs of gloves, or the cost of an evening at 
bridge. To the girl it means that every penny must be counted, 
every normal desire stifled, and each basic necessity of life barely 
satisfied by the sacrifice of some other necessity. If more food must 
be had than is given with 15-cent dinners, it must be bought with 
what should go for clothes ; if there is need for a new waist to replace 
the old one at which the forewoman has glanced reproachfully or at 
which the girls have giggled, there can be no lunches for a week and 
dinners must cost 5 cents less each day. Always too the room must 
be paid for, and back of it lies the certainty that with slack seasons 
will come lay-offs and discharges. If the breaking point has come, 
and she must have some amusement, where can it come from? Surely 
not out of $6 a week. 

Last of all are the children, for whose petty addition to the stream 
of production the Nation is paying a heavy toll in ignorance, deformity 
of body or mind, and premature old age. After all, does it matter 
much what they are paid? For all experience has shown that in 
the end the father's wages are reduced by about the amount that 
the children earn. This is the so-called " family wage," and examin- 
ation of the wages in different industries corroborates the theory 


that in those industries, such as textiles, where women and children 
can be largely utilized, the wages of men are extremely low. 

The competitive effect of the employment of women and children 
upon the wages of men, can scarcely be overestimated. Surely it is 
hard enough to be forced to put children to work, without having 
to see the wages of men held down by their employment. 

This is the condition at one end of the social scale. What is at 
the other? 

Massed in millions, at the other end of the social scale, are fortunes 
of a size never before dreamed of, whose very owners do not know the 
extent nor, without the aid of an intelligent clerk, even the sources of 
their incomes. Incapable of being spent in any legitimate manner, 
these fortunes are burdens, which can only be squandered, hoarded, 
put into so-called " benefactions " which, for the most part, constitute 
a menace to the State, or put back into the industrial machine to pile 
up ever-increasing mountains of gold. 

In many cases, no doubt, these huge fortunes have come, in whole 
or in part, as the rich reward of exceptional service. None would 
deny or envy him who has performed such service the richest of re- 
wards, although one may question the ideals of a Nation which re- 
wards exceptional service only by burdensome fortunes. But such 
reward can be claimed as a right only by those who have per- 
formed service, not by those who through relationship or mere para- 
sitism chance to be designated as heirs. Legal right, of course, they 
have by virtue of the law of inheritance, which, however, runs counter 
to the whole theory of American society, and which was adopted, 
with important variations, from the English law, without any con- 
ception of its ultimate results and apparently with the idea that it 
would prevent exactly the condition which has arisen. In effect the 
American law of inheritance is as efficient for the establishment and 
maintenance of families as is the English law, which has bulwarked 
the British aristocracy through the centuries. Every year, indeed, 
sees this tendency increase, as the creation of " estates in trust " 
secures the ends which might be more simply reached if there were 
no prohibition of " entail." According to the income-tax returns for 
10 months of 1914, there are in the United States 1,598 fortunes yield- 
ing an income of $100,000 or more per year. Practically all of these 
fortunes are so invested and hedged about with restrictions upon 
expenditure that they are, to all intents and purposes, perpetuities. 

An analysis of 50 of the largest American fortunes shows that 
nearly one-half have already passed to the control of heirs or to 
trustees (their vice regents) and that the remainder will pass to the 
control of heirs within 20 years, upon the deaths of the " founders." 
Already, indeed, these founders have almost without exception re- 
tired from active service, leaving the management ostensibly to their 
heirs but actually to executive officials upon salary. 

We have, according to the income-tax returns, 44 families with 
incomes of $1,000,000 or more, 1 whose members perform little or no 
useful service, but whose aggregate incomes, totaling at the very 
least $50,000,000 per year, are equivalent to the earnings of 100,000 
wage earners at the average rate of $500. 

The ownership of wealth in the United States has become concen- 
trated to a degree which is difficult to grasp. The recently published 

1 The income tax statistics, as a matter of fact, cover only a period of 10 months in 1914. 


researches of a statistician of conservative views 1 have shown that 
as nearly as can be estimated the distribution of wealth in the United 
States is as follows: 

The " rich," 2 per cent of the people, own 60 per cent of the wealth. 

The " middle class," 33 per cent of the people, own 35 per cent of 
the wealth. 

The "poor," 65 per cent of the people, own 5 per cent of the wealth. 

This means in brief that a little less than 2,000,000 people, who 
would make up a city smaller than Chicago, own 20 per cent more 
of the Nation's wealth than all the other 90,000,000. 

The figures also show that with a reasonably equitable division of 
wealth, the entire population should occupy the position' of comfort 
and security which we characterize as middle class. 

The actual concentration has, however, been carried very much 
further than these figures indicate. The largest private fortune in 
the United States, estimated at $1,000,000,000, is equivalent to the 
aggregate wealth of 2,500,000 ^ of those who are classed as "poor," 
who are shown in the studies cited to own on the average about $400 

Between the two extremes of superfluity' and poverty is the large 
middle class farmers, manufacturers, merchants, professional men, 
skilled artisans, and salaried officials whose incomes are more or 
less adequate for their legitimate needs and desires, and who are 
rewarded more or less exactly in proportion to service. They have 
problems to meet in adjusting expenses to income, but the pinch of 
want and hunger is not felt, nor is there the deadening, devitalizing 
effect of superfluous, unearned wealth. 

From top to bottom of society, however, in all grades of incomes, 
are innumerable number of parasites of every conceivable type. 
They perform no useful service, but drain off from the income of the 
producers a sum whose total can not be estimated. 

This whole situation has never been more accurately described 
than by Hon. David Lloyd-George in an address on " Social waste " : 

I have recently had to pay some attention to the affairs of the Sudan, in 
connection with some projects that have been mooted for irrigation and develop- 
ment in that wonderful country. I will tell you what the problem is you may 
know it already. Here you have a great, broad, rich river upon which both the 
Sudan and Egypt depend for their fertility. There is enough water in it to 
fertilize every part of both countries; but if, for some reason or other, the 
water is wasted in the upper regions, the whole land suffers sterility and 
famine. There is a large region in the upper Sudan where the water has been 
absorbed by one tract of country, which, by this process, has been converted 
into a morass, breeding nothing but pestilence. Properly and fairly husbanded, 
distributed, and used, there is enough to fertilize the most barren valley arid 
make the whole wilderness blossom like the rose. 

That represents the problem of civilization, not merely in this country but in 
all lands. Some men get their fair share of wealth in a land and no more 
sometimes even the streams of wealth overflow to waste over some favored 
regions, often producing a morass, which poisons the social atmosphere. Many 
have to depend on a little trickling runlet, which quickly evaporates with every 
commercial or industrial drought; sometimes you have masses of men and 
women whom the flood at its height barely reaches, and then you witness 
parched specimens of humanity, withered, hardened in misery, living in a desert 
where even the well of tears has long ago run dry. 

1 Prof. Willard I. King, The Wealth and Income of the People of the United States. 
38819 16 3* 


Besides the economic significance of these great inequalities of 
wealth and income, there is a social aspect which equally merits the 
attention of Congress. It has been shown that the great fortunes of 
those who have profited by the enormous expansion of American in- 
dustry have already passed, or will pass in a few years, by right of 
inheritance to the control of heirs or to trustees who act as their 
" vice regents." They are frequently styled by our newspapers 
"monarchs of industry," and indeed occupy within our Eepublic a 
position almost exactly analogous to that of feudal lords. 

These heirs, owners only by virtue of the accident of birth, control 
the livelihood and have the power to dictate the happiness of more 
human beings than populated England in the Middle Ages. Their 
principalities, it is true, are scattered and, through the medium of 
stock ownership, shared in part with others; but they are none the 
less real. In fact, such scattered invisible industrial principalities 
are a greater menace to the welfare of the Nation than would be equal 
power consolidated into numerous petty kingdoms in different parts 
of the country. They might then be visualized and guarded against ; 
now their influence invisibly permeates and controls every phase of 
life and industry. 

" The king can do no wrong," not only because he is above the law 
but because every function is performed or responsibility assumed by 
his ministers and agents. Similarly our Rockefellers, Morgans, 
Fricks, Vanderbilts, and Astors can dp no industrial wrong, because 
all effective action and direct responsibility is shifted from them to 
the executive officials who manage American industry. As a basis 
for this conclusion we have the testimony of many, among which, 
however, the following statements stand out most clearly : 

Mr. John D. Rockefeller, jr.: 1 

* * * Those of us who are in charge there elect the ablest and most 
upright and competent men whom we can find, in so far as our interests give 
us the opportunity to select, to have the responsibility for the conduct of the 
business in which we are interested as investors. We can not pretend to follow 
the business ourselves. 

Mr. J. Pierpont Morgan : 

Chairman WALSH. In your opinion, to what extent are the directors of cor- 
porations responsible for the labor conditions existing in the industries in which 
they are the directing power? 

Mr. MOBGAN. Not at all I should say. 

The similitude, indeed, runs even to mental attitude and phrase. 
Compare these two statements: 
Mr. John D. Rockefeller, jr. : 

My appreciation of the conditions surrounding wage earners and my sympathy 
with every endeavor to better these conditions are as strong as those of any 

Louis XVI: 

There is none but you and me that has the people's interest at heart. (" II 
n'y a que vous et moi aimions le peuple.") 

The families of these industrial princes are already well estab- 
lished and are knit together not only by commercial alliances but by 
a network of intermarriages which assures harmonious action when- 
ever their common interest is threatened. 

1 Before congressional investigating committee. 


Effective action by Congress is required, therefore, not only to 
readjust on a basis of compensation approximating the service actu- 
ally performed, the existing inequalities in the distribution of 
wealth and income, but to check the growth of an hereditary aris- 
tocracy, which is foreign to every conception of American Govern- 
ment and menacing to the welfare of the people and the existence of 
the Nation as a democracy. 

The objects to be attained in making this readjustment are: To 
reduce the swollen, unearned fortunes of those who have a super- 
fluity ; to raise the underpaid masses to a level of decent and comfort- 
able living ; and at the same time to accomplish this on a basis which 
will, in some measure, approximate the just standard of income pro- 
portional to service. 

The discussion of how this can best be accomplished forms the 
greater part of the remainder of this report, but at this point it 
seems proper to indicate one of the most immediate steps which 
need to be taken. 

It is suggested that the commission recommend to Congress the 
enactment of an inheritance tax, so graded that, while making gen- 
erous provision for the support of dependents and the education of 
minor children, it shall leave no large accumulation of wealth to pass 
into hands which had no share in its production. 1 The revenue 
from this tax, which we are informed would be very great, should 
be reserve.d by the Federal Government for three principal purposes : 

1. The extension of education. 

2. The development of other important social services which, 
should properly be performed by the Nation, which are discussed in 
detail elsewhere. 

3. The development, in cooperation wivh States and municipali- 
ties, of great constructive works, such as road building, irrigation, 
and reforestation, which would materially increase the efficiency and 
welfare of the entire Nation. 

We are informed by counsel not only that such a tax is clearly 
within the power of Congress, but that upon two occasions, namely, 
during the Civil War and in 1898, such graded inheritance taxes 
were enacted with scarcely any opposition and were sustained by the 
Supreme Court, which held that the inheritance tax was not a direct 
tax within the meaning of the Constitution. We are aware that 
similar taxes are levied in the various States, but the conflict with 
such State taxes seems to have presented little difficulty during the 
period in which the tax of 1898 was in effect. Under any circum- 
stances this need cause no great complication, as the matter could be 
readily adjusted by having the Federal Government collect the en- 
tire tax and refund a part to the States on an equitable basis. 

There is no legislation which could be passed by Congress the 
immediate and ultimate efforts of which would be more salutary or 
would more greatly assist in tempering the existing spirit of unrest. 


As a prime cause of a burning resentment and a rising feeling of 
unrest among the workers, unemployment and the denial of an op- 

1 It is suggested that the rates be so graded that not more than $1,000,000 shall pass to 
the heirs. This can be equitably accomplished by several different gradations of taxation. 


portunity to earn a living is on a parity with the unjust distribution 
of wealth. They may on final analysis prove to be simply the two 
sides of the same shield, but that is a matter which need not be dis- 
cussed at this point. They differ in this, however, that while un- 
just distribution of wealth is a matter of degree, unemployment is 
an absolute actuality, from which there is no relief but soul-killing 
crime and soul-killing charity. 

To be forced to accept employment on conditions which are insuffi- 
cient to maintain a decent livelihood is indeed a hardship, but to be 
unable to get work on any terms whatever is a position of black 

A careful analysis of all available statistics shows that in our great 
basic industries the workers are unemployed for an average of at 
least one-fifth of the year, and that at airtimes during any normal 
year there is an army of men, who can be numbered only by hundreds 
of thousands, who are unable to find work or who have so far degen- 
erated that they can not or will not work. Can any nation boast of 
industrial efficiency when the workers, the source of her productive 
wealth, are employed to so small a fraction of their total capacity ? 

Fundamentally, this unemployment seems to rise from two great 
causes, although many others are contributory. First, the inequality 
of the distribution of income which leaves the great masses of the 
population (the true ultimate consumers) unable to purchase the 
products of industry which they create, w r hile a few have such a super- 
fluity that it can not be normally consumed but must be invested in 
new machinery for production or in the further monopolization of 
land and natural resources. The result is that in mining and other 
basic industries we have an equipment in plant and developed prop- 
erty far in excess of the demands of any normal year, the excess being, 
in all probability, at least 25 per cent. Each of these mines and 
industrial plants keeps around it a labor force which, on the average, 
can get work for only four-fifths of the year, while at the same time 
the people have never had enough of the products of those very indus- 
tries have never been adequately fed, clothed, housed, nor warmed 
for the very simple reason that they have never been paid enough to 
permit their purchase. 

The second principal cause lies in the denial of access to land and 
natural resources even when they are unused and unproductive, ex- 
cept at a price and under conditions which are practically prohibi- 
tive. This situation, while bound up with the land and taxation 
policies of our States and Nation, also rests fundamentally upon the 
unjust distribution of wealth. Land or mineral resources in the 
hands of persons of average income must and will be used either by 
their original owners or by some more enterprising person. By the 
overwhelming forces of economic pressure, taxation, and competi- 
tion they can not be permitted to lie idle if they will produce any- 
thing which the people need. Only in the hands of large owners 
free from economic pressure, able to evade or minimize the effects 
of taxation and to aw r ait the ripening of the fruits of unearned in- 
crement can land be held out of use if its products are needed. 

There can be no more complete evidence of the truth of this state- 
ment than the condition of the farms of 1,000 acres and over, which, 
valued at two and one-third billion dollars, comprise 19 per cent of 
all the farm land of the country and are held by less than 1 per cent 



of the farm owners. The United States census returns show that 
in these 1,000-acre farms only 18.7 per cent of the land is cultivated 
as compared with 60 to 70 per cent in farms of from 50 to 499 acres. 
Furthermore, it is well known that the greater part of these smaller 
farms which are left uncultivated are held by real estate men, bank- 
ers, and others w r ho have independent sources of income. More than 
four-fifths of the area of the large holdings is being held out of active 
use by their 50,000 owners, while 2,250,000 farmers are struggling 
for a bare existence on farms of less than 50 acres, and an untold 
number who would willingly work these lands are swelling the 
armies of the unemployed in the cities and towns. 

A basic theory of our Government, which found expression in the 
homestead acts, was that every man should have opportunity to secure 
land enough to support a family. If this theory had been carried 
out and homesteads had either gone to those who would use them 
productively or remained in the hands of the Government, we should 
not yet have a problem of such a character. But these acts were 
evaded; land was stolen outright by wholesale^ and fraudulent en- 
tries were consolidated into enormous tracts which are now held by 
wealthy individuals and corporations. 

The Public Lands Commission, after an exhaustive inquiry, re- 
ported in 1905 : 

Detailed study of the practical operation of the present land laws shows that 
their tendency far too often is to bring about land monopoly rather than to 
multiply small holdings by actual settlers. 

* * * Not infrequently their effect is to put a premium on perjury and 
dishonest methods in the acquisition of land. It is apparent, in consequence, 
that in very many localities, and perhaps in general, a larger proportion of the 
public land is passing into the hands of speculators than into those of actual 
settlers making homes. * * * Nearly everywhere the large landowner 
has succeeded in monopolizing the best tracts, whether of timber or agricul- 
tural lands. 

To one who has not read the preceding statements carefully there 
may seem to be a contradiction in proposing to prevent great capi- 
talists from creating an excess of productive machinery and over- 
developing mineral resources while pointing out the necessity of 
forcing land and other natural resources into full and effective use 
by the people. The two propositions are, as a matter of fact, as 
fundamentally distinct as monopoly and freedom. The capitalist 
increases his holdings in productive machinery and resources only 
because through monopolization and maintenance of prices he hopes 
to reap rewards for himself or increase his power, while the aim 
in desiring the full development of land and other resources by the 
people is that they, producing for themselves, may enjoy a sufficiency 
of good things and exchange them for the products of others, and 
thus reduce to a minimum the condition of unemployment. 

There are, of course, many other causes of unemployment than the 
inequality of wealth and the monopolization of land which there is 
no desire to minimize. Chief among these are immigration, the inade- 
quate organization of the labor market, the seasonal character of 
many industries, and the personal deficiencies of a very large num- 
ber of the unemployed. It can not be denied that a considerable 
proportion of the men who fill the city lodging houses in winter are 
virtually unemployables as a result of weakness of character, lack 

1 S. Doc. 154, 58th Cong., 3d sess., p. 14. 


of training, the debasing effects of lodging-house living and city 
dissipation, and, last but not least, the conditions under which they 
are forced to work in the harvest fields and lumber, railroad, and 
construction camps. The seasonal fluctuations of our industries are 
enormous, employing hundreds of thousands during the busy season 
and throwing them out on the community during the dull season, 
and almost nothing has been done to remedy this condition. It would 
be difficult to imagine anything more chaotic and demoralizing than 
the existing methods of bringing workmen and jobs together. Cer- 
tain measures for dealing with these conditions, which are discussed 
elsewhere in the report, need to be pushed forward with all possible 
vigor. But it may be confidently predicted that the unemployment 
situation will not be appreciably relieved until great advances have 
been made in the removal of the two prime causes unjust distribu- 
tion of wealth and monopolization of land and natural resources. 

The most direct methods of dealing with the inequality of wealth 
have already been briefly discussed and will be considered elsewhere 
in the report. With respect to the land question, however, the fol- 
lowing basic suggestions are submitted : 

1. Vigorous and unrelenting prosecutions to regain all land, water 
power, and mineral rights secured from the Government by fraud. 

2. A general revision of our land laws, so as to apply to all future 
land grants the doctrine of "superior use," as in the case of water 
rights in California, and provision for forfeiture in case of actual 
nonuse. In its simplest form the doctrine of " superior use " implies 
merely that at the time of making the lease the purpose for which 
the land will be used must be taken into consideration, and the use 
which is of greatest social value shall be given preference. 

3. The forcing of all unused land into use by making the tax on 
nonproductive land the same as on productive land of the same 
kind and exempting all improvements. 

Other measures for dealing with unemployment are discussed 
under that head on pages 103-115. 

The unemployed have aptly been called "the shifting sands be- 
neath the State." Surely there is no condition which more immedi- 
ately demands the attention of Congress than that of unemploy- 
ment, which is annually driving hundreds of thousands of other- 
wise productive citizens into poverty and bitter despair, sapping the 
very basis of our national efficiency, and germinating the seeds of 


No testimony presented to the commission has left a deeper im- 
pression than the evidence that there exists among the workers an 
almost universal conviction that they, both as individuals and as a 
class, are denied justice in the enactment, adjudication, and adminis- 
tration of law, that the very instruments of democracy are often 
used to oppress them and to place obstacles in the way of their 
movement toward economic, industrial, and political freedom and 
justice. Many witnesses, speaking for millions of workers as well 
as for themselves, have asserted with the greatest earnestness that 
the mass of the workers are convinced that laws necessary for their 
protection against the most grievous wrongs can not be passed ex- 
cept after long and exhausting struggles ; that such beneficent meas- 


ures as become laws are largely nullified by the unwarranted deci- 
sions of the courts ; that the laws which stand upon the statute books 
are not equally enforced; and that the whole machinery of Gov- 
ernment has frequently been placed at the disposal of the employers 
for the oppression of the workers; that the Constitution itself has 
been ignored in the interests of the employers; and that constitu- 
tional guaranties erected primarily for the protection of the workers 
have been denied to them and used as a cloak for the misdeeds of 

If it be true that these statements represent the opinions of the 
mass of American workers, there is reason for grave concern, for 
there are 25,000,000 of them, of whom 3,000,000 are welded together 
into compact organizations. 

But if it be true that these charges are justified; if, in fact, our 
legislators, our judges, and executives, do not afford equal considera- 
tion to the workers and are concerned with protecting the rights of 
property rather than the rights of men, and at times even become 
the instruments for the oppression of the poor and humble, then the 
situation demands and must receive the prompt and decisive action 
of every right-thinking man in order that these evils may be eradi- 
cated and justice and liberty established in the place of injustice 
and oppression. 

Before examining the evidence, it should be understood that it is 
not charged that such acts of injustice are universal, but that they 
occur so frequently and in such diverse parts of the country that 
any man may reasonably fear that he himself or those with whom 
he is associated may at any time be the victim of injustice or dis- 
crimination. It has been urged, and perhaps properly, that the 
charges would be sustained if it were found that such acts of injus- 
tice had been committed only upon rare occasions, if it should also 
be established that such injustices were allowed to stand without 
redress, and if those who were guilty of their commission were left 
unimpeached and unpunished. 

An enormous mass of evidence bearing upon these charges has 
been presented to the commission by witnesses or collected by its 
staff. This material is presented in some detail in another part of 
the report, but the summary which follows may be regarded as rea- 
sonably full and exact. 

First, with regard to the enactment of laws, it is charged that the 
workers have been unable to secure legislation to protect them against 
griev.ous wrongs, except after exhausting struggles against over- 
whelming odds and against insidious influences. 

The evidence bearing upon this question has dealt with the his- 
tory of three principal lines of legislation in which the evils sought 
to be remedies are now universally admitted to have been Very great, 
involving wanton destruction of life, the exploitation of women 
and children, and the practical enslavement of American seamen. 
A careful examination has been made of the history of attempts to 
secure adequate legislation to prevent child labor, to protect women 
against extreme hours of labor and night work, to secure the safety 
of factories, railroads, and mines, and to provide for the safety, com- 
fort, and liberty of seamen. 

The history of child-labor legislation shows that although agita- 
tion for the protection and education of children began during the 


early part of the nineteenth century in Massachusetts, Rhode Island, 
Connecticut, New York, and Pennsylvania, no adequate legislation 
was obtained until nearly the end of the century. Time after time 
in each of these industrial States the sentiment of the public was 
aroused, organization was effected, and well-drafted bills were intro- 
duced only to be killed in committee, emasculated or killed on the 
floor of the legislature, or passed with exceptions which rendered 
them entirely ineffective. Even the attempt to reduce the hours of 
children below 12 per day was bitterly contested and met by every 
known trick of legislative chicanery. The w T hole history of the con- 
test for adequate child-labor legislation is even now being repeated 
in some of the Southern States, where laws prohibiting the employ- 
ment of children are bitterly contested and beaten session after ses- 
sion by legislators, unsympathetic or controlled by the cotton-mill 

Similarly, although the movement to restrict the working hours 
of women and to prohibit night work began in Massachusetts' and 
Pennsylvania as early as 1840, the first legislation limiting the hours 
was the 10-hour bill passed in Massachusetts in 1874, and night work 
went unregulated until the passage of the act of 1899 in Nebraska. 1 

The movement for safety of life and limb in the factories and 
workshops, although pushed with great vigor in almost every session 
of the State legislatures after 1880, secured only a few acts providing 
for such obvious matters as the guarding of set screws and gears, 
but made practically no provision for their enforcement. No really 
effective -action to promote safety took place until, after many years 
of hard fighting, the first workmen's compensation acts were passed 
between 1900 and 1910, which for the first time made the unsafe con- 
dition of factories directly expensive. 

Even upon the railroads, where the safety of the public as well as 
of the workers was involved, at least 10 years of constant agitation 
on the part of the railroad brotherhoods and various interested citi- 
zens was necessary before the first Federal act providing for safety 
appliances was passed in 1893. 

In the case of the movement to secure the safety, comfort, and 
liberty of seamen, it is a matter of record that Andrew Furuseth, 
president of the seamen's union, backed not only by all the members 
of his own organization but by the entire American labor move- 
ment, attended each session of Congress and devoted his whole ener- 
gies to securing legislation upon this subject for the entire period of 
22 years from 1893 to 1915, when the seamen's bill finally became a 

Other evidence has been presented covering the long fights to 
secure legislation to remove the evils of company stores, payment in 
scrip, prison labor, arbitrary deductions from wages, " sweating," 
tenement houses, and a number of other matters upon which ade- 

1 It is worthy of note that although the decision on the Massachusetts law was favorable 
and thus established a precedent (Commonwealth v. Hamilton Mfg. Co., 120 Mass., ::8:;. it 
was thrown aside by the Illinois court in 1895 in holding unconstitutional a law of that 
State prescribing an 8-hour day for women (Ritchie v. People, 155 111., 98), and it was not 
until 1910 that the same court accepted a 10-hour law as constitutional (Ritchie v. 
Wyman, 244 111., 509). The Nebraska statute limited the hours of women to 10 a day and 
prohibited night work between the hours of 10 p. m. and 6 a. m., but the first case did not 
raise the question of night work (Wenham v. State, 65 Neb., 394). In New York, however, 
a statute regulating night work was held unconstitutional in 1907 (People v. Williams, 189 
N. Y., 131 , and it was not until the present year that a similar law was sustained (People 
v. Schweinler Press, 214 N. Y., 395). 


quate legislation has not yet been secured, except perhaps in a few 
States, although there has been unremitting agitation upon these 
questions for more than half a century. This evidence shows clearly 
that the workers have just grounds for the charge that the legisla- 
tures have been criminally slow in acting for the relief of grievous 
wrongs and have used every subterfuge to escape adequate and 
aggressive action, even while thousands of men, women, and children 
were being killed, maimed, or deformed as a result of their negli- 

Evidence has further been presented to show that such a condition 
has not been the result entirely of the complacency or slothfulness 
of legislators, but that powerful influences have been at work to 
prevent such remedial legislation. The most convincing evidence 
presented upon this phase of the question is the record of the Na- 
tional Association of Manufacturers and its allied organizations, as 
contained in the testimony and findings before congressional com- 
mittees, 1 in the printed reports of that association and in the testi- 
mony before the commission of the representatives of various State 
employers' associations. The substance of this evidence is so well 
known to Congress and to the public that it is necessary here to call 
attention only to the fact that the efforts of such associations in 
preventing the enactment of practically all legislation intended to 
improve the condition or advance the interests of workers were not 
confined to Congress, but were even more effective in the State 

The persistent and bitter manner in which the railroads fought 
the laws providing for safety appliances, although the measures were 
moderate and necessary, not only for the safety of the traveling 
public, but for the efficient operation of the roads, is well known to 

Perhaps the most significant statement regarding the insidious 
influences of this character is contained in a letter from Mr. L. M. 
Bowers, chairman of the board of directors of the Colorado Fuel & 
Iron Co., to the Secretary of Mr. John D. Rockefeller, jr., under date 
of May 13, 1913 : 

The Colorado Fuel Iron Co. for many years were accused of being the 
political dictator of southern Colorado, and, in fact, were a mighty power in 
the entire State. When I came here it was said that the C. F. & I. Co. voted 
every man and woman in their employ without any regard to their being nat- 
uralized or not, and even their mules, it used to be remarked, were registered 
if they were fortunate enough to possess names. Anyhow, a political depart- 
ment was maintained at a heavy expense. I had before me the contributions 
of the C. F. & I. Co. for the campaign of 1904, amounting to $80,605, paid out 
personally by President Hearne. All the vouchers and checks I have examined 
personally, all of which were payable to Albert A. Miller, upon which he drew 
the currency and, it is said, handed the money over to Mr. Hearne, who paid 
it out. So far as I can discover, not one particle of good was accomplished for 
the company, but Mr. Hearne was an aspirant for the position of United Spates 
Senator and devoted a vast amount of time and money with this end in view, I 
have no doubt. 

The company became notorious in many sections for their support of the 
liquor interests. They established saloons everywhere they possibly could. 

1 U. S. Senate Committee on Judiciary. Maintenance of a Lobby to Influence Legisla- 
tion. Hearings before a subcommittee pursuant to S. Res. 92, 63d Cong., 1st sess. 

Charges Against Members of the House and Lobby Activities of the National Association 
of Manufacturers of the United States and Others. Hearings before select committee of 
House of Representatives appointed under H. Res. 198, 63d Cong., 1st sess. 


This department was managed by one John Kebler, a brother of the one-time 
president of the company, who died about the time I came here, a victim of hia 
own intemperate habits. A sheriff, elected by the votes of the G. P. & I. Co. 
employees, and who has been kept in office a great many years, established him- 
self or became a partner in 16 liquor stores in our coal mines. To clean up the 
saloons and with them the gambling hells and houses of prostitution has been 
one of the things that Mr. Welborn and I have devoted an enormous amount of 
time to during the past five years. The decent newspapers everlastingly lam- 
pooned the C. F. & I. Co. at every election, and I am forced to say the company 
merited, from a moral standpoint, every shot that was fired into their camp. 
Since I came here 1 not a nickel has been paid to any politician or political 
party. We have fought the saloons with all the power we possess. We have 
forbidden any politician from going into our camps, and every subordinate offi- 
cial connected with the company has been forbidden to influence our men to 
vote for any particular candidate. We have not lobbied in the legislature, but 
have gone directly to the governor and other able men and have demanded fair 

Second, it is charged by the workers that after wholesome and 
necessary laws are passed they are in large part nullified by the courts 
either upon technicalities of a character which would not be held to 
invalidate legislation favorable to the interests of manufacturers, 
merchants, bankers, and other property owners, or thrown out on the 
broad ground of unconstitutionally, through strained or illogical 
construction of constitutional provisions. It is argued that such 
action is doubly evil, because the power to declare legislative acts 
unconstitutional has been assumed by the courts in the face of a 
complete absence of legal sanction, in complete disregard of early 
decisions denying the possession of such power, and in complete con- 
trast to the practices of the courts in every other country of the 
civilized world. It is not within our province to decide whether or 
not this assumption of power by the courts was justified. It is suffi- 
cient here merely to examine the evidence bearing upon the allega- 
tions that laws necessary for the correction of grave industrial abuses 
are nullified by strained interpretations or for reasons which would 
be insufficient in other cases, and that they are held unconstitutional 
upon pretexts which in reality are the outgrowth of economic bias 
on the part of the judges. 

A large number of decisions illustrating these points have been 
brought to the attention of the commission, but only a few need be 
cited here. It has been held, for example, even that statutes requiring 
dangerous machinery to be guarded may be disobeyed by the em- 
ployer, and children employed about such unguarded machinery 
are held to have assumed the risk. 2 The same has been held regarding 
the employment of women. 3 

Many other cases might be cited on the question of strained in- 
terpretation, 4 bearing out the assertion made by Justice Lurton, of 

1 This statement of Mr. Bowers should be considered in conjunction with his testimony 
that the evil influences created by the Colorado Fuel & Iron Co. were still in power and his 
admission that the company was deeply interested in the last State election and that 150 
men were put into the field from his office alone to work for the candidates favored by the 
company, which was deeply interested in the election of officials who would vigorously 

Srosecute the strikers. His letters narrating how the governor of Colorado was whipped 
ato line should also be considered, as well as the testimony of Dr. B. S. Gaddis, former 
head of the sociological department of the Colorado Fuel & Iron Co., that officials openly 
influenced elections. 

2 Higgins v. O'Keefe, 79 Fed., 900 ; White v. Wittemann Lith. Co., 131 N. ., 631. 

3 Knisley v. Pratt, 148 N. Y., 372. 

* Nappa v. Erie Ry. Co., 195 N. Y,, 176, 184 ; Gallagher v. Newman, 190 N. Y., 444, 
447-448 ; Cashman v. Chase, 156 Mass., 342 ; Quinlan v. Lackawanna Steel Co., 107 A. D. 
176, affirmed 191 N. Y./329 ; Finnigan v. N, Y. Contracting Co., 194 N. Y., 244. 


the Federal Supreme Court, when, in a case not involving industrial 
relations, he says: 

The judgment just rendered will have, as I think, the effect to defeat the 
clearly expressed will of the legislature by a construction of its words that 
can not be reconciled with their ordinary meaning. 1 

Probably there are no other cases which have created so much 
bitterness as those of personal injury in which the plaintiffs have 
been denied recovery of damages on the principles of " fellow serv- 
ant," " assumption of risk," and " contributory negligence," and the 
obstacles which have been created by the courts to prevent the re- 
moval of these defenses for the employer have served only to in- 
tensify the feeling. The contrast in attitude of the judges can not 
better be shown than by considering that while they have held each 
employee of a corporation responsible under these three principles 
not only for his own involuntary acts but for the physical condition 
of the entire property and the conduct of each of his fellow workers, 
they have repeatedly absolved officials, directors, and stockholders 
from responsibility for accidents, even when the unsafe condition of 
the property had been published, or when orders had been issued 
which were directly responsible for the accidents. It would hardly 
be an exaggeration to say that, if the courts had held officials and 
directors to as great a degree of responsibility as employees for the 
condition of the property and the actions of their agents, there is 
hardly one who would have escaped punishment for criminal negli- 
gence. According to the best estimates, approximately 35,000 per- 
sons were killed last year in American industry, and at least one- 
half of these deaths were preventable. 2 What would be the situation 
if the courts, following the clear logic of their own decisions, should 
hold the stockholders, directors, and officials criminally responsible 
for each of the 17,500 preventable deaths to which attention has time 
after time been directed? > 

That the courts, including even the highest tribunal of the Nation, 
do allow their economic bias to influence them in holding laws' uncon- 
stitutional is nowhere more clearly expressed than in the dissenting 
opinion of Mr. Justice Holmes in the case of Lochner v. New York, 3 
wherein the right of the Legislature of New York to limit the hours 
of work in bakeries was involved. He said : 

This case is decided upon an economic theory which a large part of the 
country does not entertain. If it were a question whether I agree with that 
theory [limiting the consecutive hours of labor in bakeries which may be re- 
quired of an employee], I should desire to study it further and long before 
making up my mind. But I do not conceive that to be my duty, because I 
strongly believe that my agreement or disagreement has nothing to do with the 
right of a majority to embody their opinions in law. 

* * * Some of these laws [referring to several which he has discussed] 
embody convictions or prejudices which judges are likely to share. Some may 
not, but a constitution is not intended to embody a particular economic theory, 
whether of paternalism and the organic relation of the citizen to the State, or 
of laissez faire. It is made for people of fundamentally differing views, and 
the accident of our finding certain opinions natural and familiar or novel, and 
even shocking, ought not to conclude our judgment upon the question whether 
statutes embodying them conflict with the Constitution of the United States. 

1 Thompson v. Thompson, 218 U. S., 611. 

2 Industrial Accident Statistics, Bui. Whole No. 157, U, S. Bureau of Labor Statistics, 

3 Lochner v. N. Y., 198 TJ. S., 45. 


This statute of the State of New York, which had been sustained 
by the courts of New York, was thus held unconstitutional, we are 
assured by the highest possible authority, on the economic theories 
of five judges, whose bias is clearly reflected in the majority opinion. 
By that action not only were the bakers of New York deprived of all 
legal relief from the hardships of working long hours in under- 
ground bakeries, but the entire movement for relieving the condition 
of other workmen in similarly unhealthful occupations throughout 
the country was effectually checked for a decade. Can these judges, 
the workers ask, absolve themselves from responsibility for the 
thousands of lives w r hich have been shortened as a result of their 
decisions, the ill health and suffering of other thousands who con- 
tracted disease as a result of unduly long exposure to bad conditions 
and a lack of sufficient fresh air and leisure ? The provision of the 
Constitution which was held to be violated by this act was the four- 
teenth amendment, designed solely to protect the emancipated 

The wide range of the labor laws declared unconstitutional may be 
seen from the following list, which includes only those cases which 
may be clearly understood from their titles : 


Requiring statement of cause of discharge. 1 

Prohibiting blacklisting. 2 

Protecting workmen as members of labor unions. 3 

Restricting power of courts to grant injunctions, etc. 4 

Protecting employees as voters (Federal). 5 

Forbidding public employment office to furnish names of applicants to em- 
ployers whose workmen were on strike. 6 

Fixing rates of wages on public works. 7 

Regulating weighing of coal at mines (four States). 8 

Providing for small attorneys' fees in successful actions to recover wage 

Fixing the time of payment of wages. 10 

Prohibiting use of " scrip." 1 

Prohibiting or regulating company stores." 

Fixing hours of labor in private employment. 13 

Defining liability of employers for injuries." 

It is difficult to find parallel cases to illustrate the difference in 
the point of view assumed by the courts upon the same constitutional 
question according to economic or social results of the decisions in 

1 Wallace <v. G. C. & N. R. Co., 94 Ga., 732. 

2 Wabash R. Co. v. Young, 162 Ind., 102. 


' 4 Pierce v 'stablemen's Union, 156 Cal., 70 ; State v. Shepherd, 177 Mo M 234 ; Cheadle v. 
State, 110 Ind., 301. 

6 United States 7\ Amsden, 1 Bissell, 283. 

6 Mathews v. People. 202 111., 389. 

7 Street v. Varney Electrical Supply Co., 160 Ind., 338. 

8 Harding v. People, 160 111., 459 ; in re Preston, 63 Ohio St., 428 ; Com. v. Brown, 8 Pa. 
Super. Ct., 339 ; In re House Bill No. 203, 21 Colo., 27. 

Randolph v. Builders' and Painters' Supply Co., 106 Ala., 501 ; Builders' Supply Depot 
v. O'Connor, 150 Cal., 265; Davidson v. Jennings, 27 Colo., 187; Manowsky v. Stephan, 
233 111., 409. 

10 Republic Iron & Steel Co. v. State, 160 Ind., 379 ; Braceville Coal Co. 17. People, 147 111., 
66 ; Johnson v. Goodyear Mining Co., 127 Cal., 4. 

11 Godcharles v. Wigeman, 113 Pa. Si., 431 ; Jordan v. State, 51 Texas Cr. App., 531. 

12 Frorer v. People. 141 111., 171 ; State v. Fire Creek Coal & Coke Co., 33 W. Va., 188. 

13 In re Morgan, 26 Colo., 415 ; Lochner v. New York, 198 U. S., 45 ; Low u. Rees Printing 
Co.. 41 Nebr., 127 ; Ritchie v. People, 155 111., 98 ; People v. Williams, 189 N. Y., 131. 

14 B:illard v. Mississippi Cotton Oil Co., 81 Miss., 507 ; Baltimore & O. S. W. R. Co. v. 
Read, 158 lud., L'5. 


different cases. There are a few clear-cut cases, however, in which 
the contrast is plainly shown, as, for example, in the inconsistency 
between the decisions in the Debs case, 1 wherein it is held that the 
control of Congress over interstate commerce is so complete that it 
may regulate the conduct of the employees engaged therein to the 
extent of enjoining them from going on a sympathetic strike, and the 
decision in the Adair case, 2 wherein it is held that Congress has so 
little power over the conduct of those engaged in interstate commerce 
that it can not constitutionally forbid employers engaged therein 
discharging their employees merely because of membership in a 
labor union. 

In this same connection it is proper to contrast the almost uniform 
prohibition by the State and Federal courts of secondary boycotts 
in labor cases even to the extent of enjoining the publication of " un- 
fair lists," with the decision in the case of Park Co. v. Druggists' 
Association (175 N. Y.). In this case the Park Co. charged that the 
Druggists' Association fixed prices of proprietary medicines; that 
they refused to sell to anyone who did not abide by the prices thus 
fixed ; that the druggists combined in this association refused to sell 
to the Park Co. ; and that they used spies to ascertain with whom the 
Park Co. did business with intent to compel such customers to cease 
doing business with the Park Co. The facts were admitted on de- 
murrer, but the court refused to issue an injunction, holding that the 
bo} T cott was caused by plaintiff himself and could be removed when- 
ever he saw fit to abide by the association's rules ; and, further, that 
there was no conspiracy. If the same line of reasoning were fol- 
lowed in labor cases, it is difficult to imagine any kind of boycott 
which would be illegal. 

Finally, reference should be made to the history of the fight for 
the enactment of eight-hour legislation in Colorado, which illustrates 
the grounds upon which the workers not only of that State, but 
throughout the Nation, distrust legislatures, courts, and executive 

Although the 8-hour day was established in Colorado gold mines 
by agreement among the operators after the Cripple Creek strike 
of 1894, in the coal-mining industry a 20-year struggle followed the 
miners' first attempt at legislation. 

The eight-hour bill presented to the general assembly in 1895, 
though supported by the Western Federation of Miners, the United 
Mine Workers of America, and labor organizations in general, was, 
upon reference to the Supreme Court for an advance opinion, re- 
ported as unconstitutional and failed of enactment. 

A bill brought successfully to enactment in 1899, and which was 
substantially a copy of the Utah law upheld by State and Federal 
Supreme Courts, was declared by the Colorado Supreme Court to be 
unconstitutional. 3 

In 1901 the people adopted by an overwhelming vote an amend- 
ment to the constitution which provided for eight-hour legislation. 
This was followed by the introduction in the next general assembly 
(1903) of several bills, and by the inauguration of active opposition 
thereto on the part of corporations. No fewer than 11 anonymous 
bulletins were attributed to one officer of a smelting company. 

1 158 TJ. S., 564. 2 208 U. S., 161. 3 In re Morgan, 26 Colo., 415. 


On account of disagreements in conference, none of the several 
bills passed ; and so great was the public outcry that at the extra ses- 
sion in July, 1903, each house passed resolutions blaming the other 
for the failure. 

In the session of 1904-5 a bill substantially the same as the present 
law, and favored by all political parties, was so amended by Mr. 
Guggenheim as to be " absolutely worthless." It remained on the 
statute books, a dead letter, until 1911. 

In 1911, house bill No. 46 was passed. The operators succeeded 
in having it submitted to a referendum vote, and at the last moment 
they initiated a smelterman's eight-hour bill, the two came up on 
the same ballot, and in the succeeding confusion both were adopted 
by the people, because of their genuine interest in the passage of an 
eight-hour law. 

The legislature of 1913 repealed both the laws so enacted in 1911, 
and reenacted house bill No. 46, the present law. By a decision of 
the Supreme Court, allowing a "safety clutch," this law may not 
be referred. 

The essential injustice and stupidity of this long fight of the em- 
ployers against eight-hour legislation is strikingly shown by a letter 
from Mr. L. M. Bowers, chairman of the board of directors of the 
Colorado Fuel & Iron Co., to Mr. J. D. Rockefeller, jr.. stating that 
after they saw that such legislation was inevitable, they tried out 
the eight-hour day in their mines and found that it was economically 
profitable. The Colorado Fuel & Iron Co. thereby is shown to have 
stubbornly resisted by every conceivable device, for a period of 20 
years, a just law which was not only necessary for the health and 
welfare of its 12,000 miners but was actually profitable for the com- 
pany itself. 

The reason for the effectiveness of the opposition of the Colorado 
Fuel & Iron Co. is also shown in the letter quoted on page 41 from 
Mr. Bowers to the secretary of Mr. Rockefeller, describing the com- 
plete and corrupt control which the company exercised over the 
State government during this period. 

Third, it is alleged by the workers that in the administration of 
law, both common and statute, there is discrimination by the courts 
against the poor and in favor of the wealthy and powerful. It is 
further stated that this discrimination arises not only from the eco- 
nomic disabilities of the poor, which render them unable to employ 
equally skillful lawyers, to endure the law's delay, and to stand the 
expense of repeated appeals, but out of an actual bias on the part 
of the judges in favor of the wealthy and influential. It should 
arouse great concern if it be true that the courts do not resolve their 
doubts in favor of the poor and humble; how much graver then is 
the injustice if the judges do in fact lean toward the rich and 
mighty ? 

To establish this claim by the presentation of a sufficient number 
of cases would be a tedious task. Many such have been presented to 
the commission but can not be considered fully here. Instead, it 
would seem that in such cases we may safely rely upon the uncon- 
tra dieted opinion of weighty authorities whose position removes 
from them any suspicion of bias. 


Ex-President William H. Taft has said: 

We must make it so that the poor man will have as nearly as possible an 
equal opportunity in litigating as the rich man; and under present conditions, 
ashamed as we may be of it, this is not the fact. 

Prof. Henry E. Seager, of Columbia University, testified before 
the commission: 

I don't see how any fair-minded person can question but what our judges 
have shown a decided bias in favor of the employers. I would not be inclined 
to ascribe this so much to a class bias, although I think this is a factor, as to 
the antecedent training of judges. Under our legal system the principal task 
of the lawyer is to protect property rights, and the property rights have come 
to be concentrated more and more into the hands of corporations, so that the 
successful lawyer of to-day, in a great majority of cases, is the corporation 
lawyer. His business is to protect the rights of employers and corporations. 
It is from the ranks of successful lawyers, for the most part, that our judges 
are selected, and from that results inevitably a certain angle on the part of a 
majority of our judges. 

The bias of the courts is nowhere more clearly shown than in cases 
involving persons and organizations with whose economic and social 
views the court does not agree. An interesting example may be cited 
in the case of Warren v. United States, 183 Fed., 718, where the 
editor of Appeal to Reason, Fred D. Warren, was sentenced by the 
Federal district court to six months' imprisonment and a fine of $1,500 
for the circulation through the mails of matter offering a reward to 
anyone who would kidnap a certain governor for whom extradition 
had been refused. 1 

The sentence was commuted by President Taft, against the protest 
of Warren, to a fine of $100 to be collected in a civil suit. In com- 
menting on the sentence, President Taft is reported to have said : 

The district court evidently looked beyond the record of the evidence in this 
case and found that Warren was the editor and publisher of a newspaper en- 
gaged in a crusade against society and government. 

Moreover, this is not a prosecution for criminal libel ; it is a prosecution for 
what at best is the violation of a regulation as to the use of the mails. To 
visit such an offense with a severe punishment is likely to appear to the public 
to be an effort to punish the defendant for something that could not be charged 
in the indictment. 

This obviously was not intended as a reflection upon the court, 
but the attitude of a large part of the workers is that if President 
Taft was justified in making such an assertion it was a case demand- 
ing impeachment of the judges involved rather than a commutation 
of sentence for Warren. 

Fourth, it is charged by the representatives of labor not only that 
courts have neglected or refused to protect workers in the rights 
guaranteed by the Constitution of the United States and of the 
several States, but that sections of the Constitution framed primarily 
to protect human rights have been perverted to protect property 
rights only and to deprive workers of the protection of rights se- 
cured to them by statutes. 

First, with regard to the Federal courts, it is startling and alarm- 
ing to citizens generally, and particularly to workers, to learn that 
the concensus of Federal decisions is to the effect that the sections 
of the Constitution defining the rights of citizens to trial by jury, 

1 It was alleged by Warren that this was done to call attention to the gross dis- 
crimination in the case of Haywood and Moyer, who were kidnaped aud transported from 
one State to another. 


security from unwarranted arrest and search, free speech, free 
assembly, writ of habeas corpus, bearing of arms, and protection 
from excessive bail and cruel and unusual punishments, apply only 
to Federal jurisdiction and in reality protect the citizen only against 
the action of the Federal Government. The only sections protect- 
ing the personal rights of citizens under ordinary circumstances 
are the thirteenth amendment, prohibiting involuntary servitude, 
the fifteenth, protecting the right to vote, and the fourteenth, pro- 
viding that " No State shall make or enforce any law which shall 
abridge the privileges or immunities of citizens of the United States ; 
nor shall any State deprive any person of life, liberty, or property, 
without due process of law, nor deny any person within its juris- 
diction the equal protection of the laws." 

We are, however, informed by counsel who has examined the cases 
involved that the fourteenth amendment has had no appreciable 
effect in protecting personal rights. According to the existing de- 
cisions, the due-process clause does not guarantee the right of trial 
by jury, 1 nor does it necessitate indictment by grand juries, 2 nor 
has it restrained arbitrary arrests and imprisonment on the part of 
State governments when men are kidnaped in one State and carried 
to another. 3 

Up to 1911 the United States Supreme Court intervened in 55 cases 
in which the fourteenth amendment was invoked. In 39 of these 
cases .private corporations were the principal parties. Thirty-two 
statutes were affected by these decisions, and in only three, concern- 
ing the civil rights of negroes, were the personal rights of individual 
citizens involved. With the exceptions involving the rights of 
negroes in jury cases (e. g., Strauder v. West Virginia, 100 U. S., 
303), the fourteenth amendment has not acted to secure or protect 
personal rights from State encroachment, 4 but only to prevent en- 
croachment on property rights. 5 In all the other numerous cases in 
which the fourteenth amendment was invoked to protect personal 
rights, the attempt failed. 

On the other hand there is abundant evidence of the great protec- 
tion which it affords corporations and other forms of organized 
capital. On that point we may quote the statements of Mr. C. W. 
Collins, of the Alabama bar, who analyzed the decisions of the United 
States Supreme Court through the October, 1910, term. 6 

Private corporations are using it as a means to prevent the enforcement of 
State laws. Since 1891 a majority of cases under the amendment have involved 
a corporation as the principal party. * * * The increase of this kind of 
litigation runs parallel to the rise of the trust movement in America. At the 
1909-10 term of the court, out of a total of 26 opinions rendered under the 
amendment 20 involved a corporation as the principal party. 

* * * The fourteenth amendment is the easiest of all constitutional meas- 
ures to invoke. In a country where economic activity is so intense and time 
so vital an element, it has been grasped as a sure measure of delay, with always 
the possibility of obtaining affirmative relief. The amendment, though in- 
tended primarily as a protection to the negro race, has in these latter days be- 

1 Maxwell v. Dow, 176 TL S., 581 ; Walker v. Sauvinet, 92 U. S., 90. 

2 Hurtaclo v. California, 119 U. S., 516. 

s He Pettibone, 12 Idaho, 264 ; 203 U. S., 192 ; Re Moyer, 35 Colo., 150 ; 140 F. R., 
870 ; 203 U. S., 221 ; Re Boyle, 6 Idaho, 609. 

* See for illustration : Virginia v. Rives. 100 TJ. S., 313 ; Plessy v. Ferguson, 163 U. S., 
537 ; Twining v. New Jersey, 211 U. S., 78 ; Brown v. N6w Jersey, 175 U. S., 172. 

6 See for illustration: C. M. & St. P. Ry. v. Minnesota, 134 11. S., 418; Cotting v. 
K. C. Stockyards Co., 183 TJ. S., 79 ; G. C. & S. F. Ry. v. Ellis, 168 U. S., 150. 
6 The Fourteenth Amendment and the States, C. W. Collins. 


come a constitutional guaranty to the corporations that no State action to- 
ward them can become effective until after years of litigation through the 
State and Federal courts to the Supreme Court of the United States. The 
course of the amendment is running away from its originally intended channel 
(p. 145). 

The fourteenth amendment, although a humanitarian measure in origin and 
purpose, has been within recent years practically appropriated by the corpora- 
tions. It was aimed at restraining and checking the powers of wealth and 
privilege. It was to be a charter of liberty for human rights against property 
rights. The transformation has been rapid and complete. It operates to-day 
to protect the rights of property to the detriment of the rights of man. It has 
become the Magna Charta of accumulated and organized capital (p. 137). 

It is thus quite clear that the fourteenth amendment not only nas 
failed to operate to protect personal rights but has operated almost 
wholly for the protection of the property rights of corporations. 
These facts taken in conjunction with the many decisions, such as 
the Lochner case, 1 in which the fourteenth amendment has been 
invoked to annul statutes designed to better conditions of life and 
work, must constitute just ground for grave concern not only to the 
workers but to every citizen who values his liberty. 

With the "bills of rights" contained in the constitutions of the 
several States, the situation, as far as the workers are concerned, is 
somewhat different, since in many jurisdictions these have been used 
upon numerous occasions to afford substantial protection to them in 
their personal rights. The workers call attention particularly, how- 
ever, to the long list of statutes, city ordinances, and military orders 
abridging freedom of speech and press, which not only have not 
been interfered with by the courts but whenever tested have almost 
uniformly been upheld by the State and Federal courts. 2 They 
point also to the grave injuries done to workers individually and 
collectively by the thousands of arrests which have been made with- 
out just cause in labor disputes, without relief from either the courts 
or the executive; to the denial of the right to the writ of habeas 
corpus upon numerous occasions; to the fact that where, as for ex- 
ample, in Los Angeles, San Diego, and Fresno (Cal.), Spokane 
(Wash.), Minot (N. Dak.), Paterson (N. J.), Little Falls (N. Y.), 
Lawrence (Mass.), Idaho, Colorado, and West Virginia, workers 
have been grievously injured, brutally treated, or interfered with in 
the pursuit of their guaranteed rights by other classes of citizens or 
by officials, the courts have not interfered and the perpetrators have 
gone unpunished. 

On the general question of martial law and habeas corpus a mem- 
ber of the staff has made an elaborate comparison of the cases aris- 
ing- from nonlabor disturbances with the cases arising from labor 
disturbances. It is not necessary, and would require too much space, 
to recite these cases in full, but among the former may be mentioned 
the Milligan case, and other cases arising in the State courts of Indi- 
ana, Illinois, Kentucky, North Carolina, and Wisconsin 3 (all during 
or immediately following the Civil War), and three cases in the 
courts of Kentucky, Ohio, and Oklahoma since that time ; 4 among 

1 Lochner v. N. Y., 198 U. S., 45. 

2 Fox v. Washington, 236 U. S.. 273 ; Fitts v. Atlanta, 121 Ga., 267 ; Ex parte Thomas, 
102 Pacific, 19. 

3 In re Milligan, 4 Wall. (U. S.), 2; Skeen v. Monkeimer, 21 Ind., 1; Johnson v. 
Jones, 44 111., 142 ; Corbin v. Marsh, 2 Dur., 193 ; Ex parte Moore, 64 N. C. f 802 ; 
In re Kemp, 16 Wis., 382. 

4 Franks v. Smith, 142 Ky., 232 ; Ohio v. Coit, 8 Ohio, 62 ; Fluke v. Canton, 31 Okla., 718. 

38819 16 4* 


the latter, i. e., those arising from labor disturbances, are included 
the cases from Colorado, Idaho, Montana, Pennsylvania, and West 
Virginia. 1 The results of such comparison are summarized in part 
as follows: 

Although uniformly held that the writ of habeas corpus can only be sus- 
pended by the legislature, in these labor disturbances the executive has in fact 
suspended or disregarded the writ. In the labor cases the judiciary either 
disregards the fact that the writ has been suspended by the executive or evades 
the issue. In nonlabor cases the courts have protested emphatically when the 
executive attempted to interfere with the writ of habeas corpus. 

In many instances in which the military has been in active operation be- 
cause of nonlabor disturbances, the judiciary has almost without exception pro- 
tested against the exercise of any arbitrary power and has almost uniformly 
attempted to limit that power. 

In cases arising from labor agitations, the judiciary has uniformly upheld 
the power exercised by the military, and in no case has there been any pro- 
test against the use of such power or any attempt to curtail it, except in Mon- 
tana, where the conviction of a civilian by military commission was annulled. 

Finally, it is impossible to imagine a more complete mockery of 
justice and travesty upon every conception of fair dealing than the 
innumerable decisions holding unconstitutional wise and salutary 
laws for the protection of workers, upon the ground that they vio- 
late the right of contract, even while the workers, whose rights are 
supposed to be affected, clamor for the maintenance of the statute. 
The appeal for the protection of the workers' rights in such cases 
comes invariably from the employers, and is urged against the pro- 
test of the workers, yet in almost unbroken succession the judges sol- 
emnly nullify the wisest acts of legislatures on just such specious, 
self-serving pleas. There are notable cases in which the judges have 
unmasked the mummery, as, for example, in Holden v. Hardy, 2 where 
it was said: 

Although the prosecution in this case was against the employer of labor, who, 
apparently, under the statute, is the only one liable, his defense is not so much 
that his right to contract has been infringed upon, but that the act works a 
peculiar hardship to his employees, whose right to labor as long as they please 
is alleged to be thereby violated. The argument would certainly come with 
better grace and greater cogency from the latter class. 

There appear to be no reported cases in which the workers have 
urged that their rights are violated by such restrictive legislation, 
which in fact invariably originates with them; but the courts con- 
tinue to hand down decisions " protecting the sacred right of con- 
tract of the worker," when the only person benefited is the employer, 
who is thus able to " turn the very Constitution itself into an instru- 
ment of inequality." 

This entire situation is fraught with such grave dangers not only 
to the workers but to all citizens who value their individual liberty, 
that the Nation can not be entirely secure until those fundamental 
rights are affirmatively guaranteed to every citizen of the United 
States by the Federal Government. It is therefore earnestly recom- 
mended that Congress forthwith initiate an amendment to the Con- 
stitution securing these rights against encroachment by Federal, 
State, or local governments or by private persons and corporations. 

Fifth. It is charged that the ordinary legal machinery provides 
no adequate means whereby laborers and other poor men can secure 

1 In re Moyer, 35 Colo.. 159 ; in re Boyle, 6 Idaho, 609 ; In re McDonald. 49 Mont., 
455; Com. v. Shortall, 206 Pa., 165; Mays and Nance v. Brown, 71 W. Va., 519; Ex 
parte Jones, 71 W. Va., 567. 

2 169 U, S., 366. 


redress for wrongs inflicted upon them through the nonpayment of 
wages, through overcharges at company stores, through exorbitant 
hospital and other fees, fines, and deductions through fraud on the 

Eart of private employment offices, loan offices, and installment 
ouses, and through the " grafting " of foremen and superintendents. 
The losses to wage earners from these sources are stated to amount 
each year to millions of dollars and to work untold hardship on a 
class of men who can ill afford to lose even a penny of their hard- 
won earnings. 

These charges were thoroughly investigated in all parts of the 
country by an experienced member of the commission's staff. 

He cites, for example, that in California, where the situation has 
been more completely uncovered than elsewhere and where remedies 
are beginning to be applied, during the year ending June, 1914, 
9.621 claims were presented to the commissioner of labor alone. Of 
these, 7,330 were for nonpayment of wages, of which 4,904 were suc- 
cessfully settled and $110.912 of unpaid wages was collected. This is 
believed to have been only a small proportion of the total claims of 
laborers throughout the State, inasmuch as the number of claims was 
growing rapidly as the work of the bureau became better known, 
and because, during a period of only 10 months, over 2,200 claims 
were presented to the State commission on immigration and hous- 
ing. The work of handling these claims and making its existence 
known to laborers throughout the State was just getting well under 
way, although with a small appropriation and inadequate force, 
when the collection of wage claims was suddenly checked by a de- 
cision of 'the State court of appeals 1 that the payment-of- wages law 
was unconstitutional on the ground that since it provided for fine 
or imprisonment where the wages of laborers were illegally retained, 
it was in effect a provision for imprisonment for debt. 

The investigation in other States revealed equally bad or worse 
conditions, while in all except a few no efficient means existed by 
which these claims could be prosecuted. In conclusion, our investi- 
gator reported : 

(a) The existing labor and life conditions of common laborers in 
this country produce immense numbers of justified labor complaints 
and claims, involving not only great sums of money in the aggre- 
gate but untold personal hardship and suffering. 

(Z>) The existing public and private legal institutions are utterly 
inadequate to secure justice to the laborers in the matter of these 
complaints and claims. 

(c) This situation has already created in the laborers distrust of 
the Government, of employers, and of the well-to-do classes gener- 
ally, and is one of the contributory causes of the existing industrial 

The measures recommended, which have to do largely with State 
and local administrations, are discussed on page 89. It is sug- 
gested, however, that the commission recommend to Congress that, 
inasmuch as the immigrant laborers, who suffer most largely from 
these injustices, are ethically and legally wards of the Nation until 
they become citizens, the Bureau of Immigration of the Federal 
Department of Labor should be given the authority and necessary 

!Nov. 23, 1914. 


appropriations to establish, wherever it may seem necessary, in con- 
nection with its existing offices in all parts of the country, legal aid 
divisions which would freely and aggressively prosecute these claims 
and complaints on behalf of the immigrant laborers, and, if there 
are no constitutional or statutory barriers, on behalf also of Ameri- 
can citizens. 

Sixth. It is charged by the workers that the courts, by the unwar- 
ranted extension of their powers in the issuance of injunctions, have 
not only grievously injured the workers individually and collectively 
upon innumerable occasions but have, by the contempt procedure 
consequent upon disobedience to such injunctions, deprived the work- 
ers of the right, fundamental to Anglo-Saxon institutions, to be tried 
by jury. 

This charge is not limited to members of trades-unions, nor to work- 
ers, but is voiced also by many who have no reason for partisanship. 
For example, Mr. S. S. Gregory, former president of the American 
Bar Association, testified before the commission : 

These injunctions are based upon the theory that the man carrying on a busi- 
ness has a certain sort of property right in the good will or the successful con- 
duct of that business; and that when several hundred or several thousand 
excited men gather around his premises where he carries his business on and 
threaten everybody that comes in there to work, and possibly use violence, that 
that is such an unlawful interference with property right as may be the subject 
of protection in equity. And that view of the law has been sustained by the 
courts of practically all the States. 

But the great difficulty about this was this, that having enjoined defendants, 
namely, striking workmen, perhaps from unlawful interference with the busi- 
ness of the employer, where that unlawful interference consisted in an attack 
or an assault and battery upon another man, to wit, perhaps a strikebreaker 
so-called, or one who was hired to take the place of one of the striking work- 
men, that thereafter the judge who had ordered the injunction and whose 
authority had been thus defied, was permitted to put the person charged with 
the breach of that injunction upon trial upon a charge of contempt, really for 
having committed an unlawful and criminal act. 

Now the Constitution has thrown around the prosecution of criminals (the 
Constitutions, State and Federal) a number of securities. They are entitled 
to trial by jury ; they are entitled to be confronted by the witnesses who are to 
testify against them ; they are entitled to be heard by counsel. 

But none of those guaranties except perhaps the right to be heard by counsel 
is secured in contempt proceedings ; and the obvious wisdom of permitting 12 
men drawn from the body of the people to pass on questions of fact men who 
are supposed to be prejudiced neither for nor against the parties, who know 
nothing about the case until they are sworn in the jury box has so far com- 
mended itself to the wisdom of legislators and jurists to such a degree that it 
has become a permanent feature of our jurisprudence ; and to provide that the 
court may proceed against parties for contempt, where the conduct charged 
against them is criminal, is really an evasion of the constitutional guaranties 
and a plain attempt to commit to equity jurisdiction over matters which it has 
been decided over and over again by all the courts that it has no jurisdiction 
with respect to, namely, the administration of the criminal law. 

For instance, I might receive, as I leave the room of this tribunal to-day, a 
threatening letter from somebody saying they were going to kill me for some- 
thing I had said, or had not said, before the commission. Now, that involves 
personal loss possibly to my wife or those dependent upon me ; but no court of 
equity would listen for a moment to a bill I should file saying "A B " or some 
other blackhand gentleman had threatened to kill me, or if filed by anybody 
dependent upon me, and therefore there should be an injunction to prevent him 
from killing me. That would be an absurdity a legal absurdity ; and none the 
less is it so where a man is enjoined from committing acts of violence in a 
strike to try him for contempt, without a trial by jury. And that has been an 
injustice that has rankled in the minds of everybody that has been a victim 
of it, and justly so. 


Sir Charles Napier says, "People talk about agitators, but the only real 
agitator is injustice ; and the only way is to correct the injustice and allay the 

Judge Walter Clark, chief justice of the Supreme Court of North 
Carolina, also testified before the commission as follows: 

Chairman WALSH. Have you studied the effect of the use of injunctions in 
labor disputes generally in the United States, as a student of economics and 
the law? 

Judge CLAKK. I do not think they can be justified, sir, * * * [Their 
effect] has been, of course, to irritate the men, because they feel that in an 
Anglo-Saxon community every man has a right to a trial by jury, and that to 
take him up and compel him to be tried by a judge is not in accordance with 
the principles of equality, liberty, and justice. 

Chairman WALSH. Do you think that has been one of the causes of social 
unrest in the United States? 

Judge CLAKK. Yes, sir ; and undoubtedly will be more so, unless it is remedied. 

It is not within the province of the commission to attempt to decide 
the question of whether or not the issuance of such injunctions is an 
unwarranted extension upon the part of the courts ; but the weighty 
opinions cited above are very impressive and are convincing that the 
workers have great reason for their attitude. It is known, however, 
from the evidence of witnesses and from the information collected by 
the staff, that such injunctions have in many cases inflicted grievous 
injury upon workmen engaged in disputes with their employers, and 
that their interests have been seriously prejudiced by the denial of 
jury trial, which every criminal is afforded, and by trial before the 
judge against whom the contempt was alleged. 

It is felt to be a duty, therefore, to register a solemn protest against 
this condition, being convinced of its injustice not only by reason of 
the evil effects which have resulted from this procedure, but by 
virtue of a conviction that no person's liberty can safely be decided 
by any one man, particularly when that man is the object of the 
alleged contempt. 

The Clayton Act undoubtedly contains many features which will 
relieve this situation as far as the Federal courts are concerned, but 
it seems clear that it does not contain anything like a complete solu- 
tion of the existing injustices, even for the limited field of Federal 

Seventh, it is charged by the representatives of labor that laws de- 
signed for the protection of labor in workshops and mines and on 
railroads are not effectively enforced, except in a few States. This 
is a matter of considerable moment to labor, but it is, after all, re- 
garded by the workers, since it concerns chiefly only their safety and 
comfort, as ranking far below the other matters discussed, which in- 
volve primarily their liberty and rights as freemen and, secondarily, 
their only means of bettering their condition. Moreover, it is almost 
entirely a matter of administration, which is discussed in detail else- 
where in the report. With the great attention which the method of 
administration is now receiving, not only from labor organizations 
but from civic organizations, and lately even from employers' asso- 
ciations, it is likely to reach a satisfactory stage before very long. 

Eighth, it is charged that in cases involving industrial questions, 
the workers are liable to great injustice by reason of the fact that in 
many localities they are excluded from juries either by the qualifica- 
tions prescribed (usually payment of property tax) or by the method 
of selection. 


In California, for example, it was testified that grave injustice 
had heen done in many cases because the juries (composed only of 
property owners, for the most part employers) were greatly prej- 
udiced against the defendants, whose program, if successful, would 
directly or indirectly affect the interests of the jurors. 

Similarly, in Cook County, 111., which includes Chicago, it was 
found by a committee of the Lawyers' Association of Illinois that 
although the system of selection by commissioners was intended to 
produce an impartial selection from all classes of the community, 
out of probably 1,000 different occupations in Cook County the 
commissioners confine the selection of the great bulk of the jurors 
to the following 10 occupations: Managers, superintendents, fore- 
men, presidents and owners of companies, secretaries of companies, 
merchants, agents, salesmen, clerks, and bookkeepers. 

To quote from the report : 

There are 76,000 mechanics affiliated with the Building Trades Council in 
Chicago, yet in the 3,440 jurors investigated by your committee there are only 
200 mechanics drawn from the 76,000 in the Building Trades Council. 

There are about 200,000 mechanics belonging to the different labor organiza- 
tions in Chicago, yet there are only about 350 mechanics drawn as jurors by 
the commissions in the 3,440 investigated, or about 10 per cent, when the per- 
centage ought to be about 70 per cent. 

The report of the committee adds: 

Another comparison will show that out of these 3,440 jurors the commission 
took only 314 jurors from 130 different occupations, or an average of less than 3 
jurors from each occupation, while from the 10 favored occupations mentioned 
above, 1,723 jurors were picked, or the grossly excessive average of 172 from 
each of said 10 occupations. 1 

A similar situation was disclosed by the investigations of members 
of the staff in Paterson, N. J. 

Finally, there is the very grave situation where, by putting aside 
the legal and customary methods, the jury is chosen by the sheriff 
or other officers, who may be unduly influenced by either party to 
the case. Such a situation, inimical in the extreme to the interests 
of the workers, has been conclusively proved to have existed in Colo- 
rado and in other mining districts. 

In the belief that the right to trial by an impartial jury is neces- 
sary for the maintenance of justice, and that such impartiality can 
be secured only by including all classes of citizens, it is suggested 
that the commission recommend that Federal and States statutes 
should be passed providing for the creation of juries by drawing 
the names from a wheel, or other like device, which shall contain the 
name of every qualified voter in the district from which the jury is 
to be selected. The adoption of this method in Missouri and other 
States has resulted uniformly in securing impartial juries of much 
higher grade, and has also eliminated almost entirely the sources of 
corruption attending the selection of juries. 

Ninth, it is charged by the workers that, during strikes, innocent 
men are in many cases arrested without just cause, charged with 
fictitious crimes, held under excessive bail, and treated frequently 
with unexampled brutality for the purpose of injuring the strikers 
and breaking the strike. 

In support of this charge, the commission has been furnished with 
evidence showing that in a number of recent strikes large numbers 

1 Eternal Vigilance is the Price of Liberty. Report of committee to the Lawyers' 
Association of Illinois, 1914. 


of strikers were arrested, but that only a small number were brought 
to trial and relatively few were convicted of any serious offense; 
that those arrested were, as a rule, required to give heavy bail, far 
beyond their means, or were detained without trial until their effec- 
tiveness as strikers was destroyed; and that in many cases strikers 
were brutally treated by the police or by special deputies in the pay 
of the companies. A number of these strikes have been investigated 
by public hearings of the commission, by members of its staff, or by 
other departments of the Federal Government. In each of the strikes 
investigated the charges as made were in essentials substantiated. 

In Paterson, N". J., which was investigated with unusual thorough- 
ness and which, because of its size and its location in the most 
densely populated section, might be considered likely to be free from 
such abuses, it was found that during the strike of the silk workers 
2,238 arrests, charging unlawful assembly or disorderly conduct, 
were made, and that in all there were 300 convictions in the lower 
courts. Men arrested for unlawful assembly were held in bail of 
$500 to $5,000. The right of trial by jury was generally denied. 
Men were arrested for ridiculous reasons, as, for example, for stand- 
ing on the opposite side of the street and beckoning to men in the 
mills to come out. This was the allegation on which the charge of 
unlawful assembly was placed against four men, and for which they 
were sent to jail in default of $500 bail, and, although never indicted, 
the charges still stand against them as a bar to their rights as citizens 
and voters. Men were fined arbitrarily, as in the case of one who 
was fined $10 for permitting strikers to sit on a bench in front of his 
house. Not more than $25 worth of damage was done during the 
entire strike, involving 25,000 workers, and there was no actual 
violence or attempt at violence on the part of the strikers during the 
entire strike. Under such conditions the editor of a local paper was 
arrested, charged with criminal libel, for comparing the conditions 
in Paterson with the rule of Cossacks; and four men who sold the 
paper on the streets also were arrested. The editor was tried and 
convicted in the lower court, but the verdict was set aside by the 
Supreme Court, while the four men, after being held several days 
in default of bail, were released without trial. 

It is impossible to summarize the activities of the police and au- 
thorities during this strike better than by referring to the testimony 
of two of the leading citizens of Paterson, who said that they had 
resolved to get rid of the " agitators " and were ready to go beyond 
the law to accomplish their purpose. 1 A full appreciation of the 

1 In a letter recently received from one of these witnesses his position is reiterated 
with a striking illustration of inability to comprehend the fundamental principles of 
American Government and the limitations imposed upon the power of one class to 
oppress another : 

" Another point which is only partially covered in my testimony is in regard to what 
Chairman Walsh endeavored to get me and various other citizens to admit would be an 
infraction of free speech and personal liberty if the agitators were prevented from coming 
into Paterson or not permitted to hold their meetings here. The United States Govern- 
ment puts up the bars at Ellis Island against certain classes of ' undesirable citizens,' 
and as far as I have been able to learn the Government's action in debarring from this 
country the immoral and criminal class and those who would become a charge on the 
country meets with the approval of the Americans generally. If it is proper and right for 
the United States Government to say who shall and who shall not enter this country I 
think it is equally proper for the city of Paterson to debar undesirable citizens who are 
coming here to sow discontent and cause trouble in the city. New York City has had a 
dead line at Fulton Street for a great many years and the police authorities have pre- 
vented certain persons from crossing that line, and this has been considered a proper 
exercise of the police powers of the city. I can see no difference between this action on 
the part of the New York authorities and similar action which was desired by many of 
our citizens in Paterson in regard to the I. W. W. agitators." 


injustice committed during this strike can be secured only by read- 
ing the testimony taken at Paterson and the reports of the com- 
mission's investigators based upon the records of the police and the 

In Los Angeles and Indianapolis essentially the same conditions 
were found by the commission, while in McKees Rocks, Bethlehem, 
and Westmoreland County, Pa., Lawrence, Mass., and Calumet, 
Mich., investigated by the Federal Department of Labor, essentially 
the same conditions of injustice were found to prevail. The condi- 
tions in West Virginia and Colorado, which were almost beyond 
belief and had the additional feature of military rule, will be dis- 
cussed elsewhere. > 

An examination of the entire mass of evidence is convincing that 
such conditions are in fact typical of strikes which are serious enough 
to arouse the authorities, especially where the workers are unor- 
ganized before the strike and therefore lacking in influence in the 

Tenth, it is asserted by the workers that in many localities during 
strikes not only is one of the greatest functions of the State, that of 
policing, virtually turned over to employers or arrogantly assumed 
by them, but criminals employed by detective agencies and strike- 
breaking agencies are clothed, by the process of deputization, with 
arbitrary power and relieved of criminal liability for their acts. 

Only three such cases are cited here, though the commission has in 
its records evidence regarding a considerable number. At Roosevelt, 
N. J., it was found by the commission's investigators and later con- 
firmed in court that the office of sheriff was virtually turned over to 
one Jerry O'Brien, the proprietor of a so-called detective agency; 
that he imported a number of men of bad reputation and clothed 
them with the authority of deputies; and that on January 19, 1915, 
these criminals, without provocation, wantonly shot and killed 2 
men and wounded 17 others who were on strike against the American 
Agricultural Chemical Co., which paid and armed the deputies. 

Similarly, during the Calumet, Mich., strike, about 230 men were 
imported from detective agencies in eastern cities, 52 under pay from 
the county board of supervisors, which was made up almost entirely of 
copper company officials. The actions of these men were so wantonly 
brutal that they were censured by the local judge, but they went 
unchecked in their career of arrogant brutality, which culminated in 
their shooting, without provocation, into a house in which women 
and children were, killing two persons and wounding two others. 

The recent strike in Bayonne, N. J., threw more light on these 
armed guards. During this strike one of the New York detective 
agencies furnished for the protection of the Tidewater Oil Co.'s 
plant men who were so vicious and unreliable that the officials of 
the company themselves say that their presence was sufficient to incite 
a riot. These men shot without provocation at anyone or everyone 
who came within sight, and the killing of at least three strikers in 
Bayonne and the wounding of many more is directly chargeable to 
these guards. 

The character of the men who make a specialty of this kind of 
employment has never been more frankly described than in the testi- 
mony of Mr. L. M. Bowers, chairman of the board of directors of 


the Colorado Fuel & Iron Co., who repeatedly referred to those in 
the employ of that company as " cutthroats," against whose charac- 
ter, he stated, he had frequently protested. 

According to the statement of Berghoff Bros. & Waddell, who 
style themselves "labor adjusters" and who do a business of strike 
breaking and strike policing, there are countless men who follow this 
business at all times. They say they can put 10,000 armed men into 
the field inside of 72 hours. The fact that these men may have a 
criminal record is no deterrent to their being employed, and no check 
can be made on the men sent out by these companies on hurry calls. 

When the question of providing the bail for these men arose as a 
result of the killing of the strikers at Bayonne, the company attor- 
ney actually declined to furnish bail for them on the ground that 
they were thugs of whom the company knew nothing and that it 
would not be responsible for their appearance. 

In view of the endless crimes x committed by the employees of the 
so-called detective agencies, who have been permitted to usurp a func- 
tion that should belong only to the State, it is suggested that the com- 
mission recommend to Congress either that such of these agencies as 
may operate in more than one State, or may be employed by cor- 
porations engaged in interstate commerce, or may use the mails, shall 
be compelled to take out a Federal license, with regulations to insure 
the character of their employees and the limitation of their activities 
to the bona fide business of detecting crime, or that such agencies 
shall be utterly abolished through the operation of the taxing power 
or through denying them the use of the mails. 

Eleventh. It is charged that in many localities the entire system 
of civil government is suspended during strikes and there is set up 
in its place a military despotism under so-called martial law. 

In West Virginia, for example, during the strike of coal miners 
in 1912 martial law was declared and the writ of habeas corpus 
denied, in the face of a direct prohibition by the constitution of the 
State, in spite of the fact that the courts were open and unobstructed, 
and without reference to the protests of the strikers. Persons out- 
side the military zone were arrested, dragged before military courts, 
tried and sentenced under so-called martial law. Upon appeal to 
the civil courts of the State the actions of the military authorities 
were upheld, in spite of the oath of the judges to support the consti- 
tution, which in terms provided " that no citizen, unless engaged in 
the military service of the State, shall be tried or punished by any 
military court for any offense that is cognizable by the civil courts 
of the State," and, further, " The privilege of the writ of habeas 
corpus shall not be suspended." 

The decisions of the court stirred Hon. Edgar M. Cullen, a former 
chief judge of the Court of Appeals of New York a witness before 
this commission and recognized as unusually conservative and care- 
ful in his utterances to make the following statements: 

Tinder these decisions the life and liberty of every man within the State 
would seem to be at the mercy of the governor. He may declare a state of war, 
whether the facts justify such a declaration or not, and that declaration is con- 
clusive upon the courts. 

1 See the reports of congressional committees which investigated the Homestead strike, 
the Pullman strike, and the recent strikes in Colorado and West Virginia. 


If he declares only a portion of the State to be in a state of war, under the 
decision in the second case a person in any other part of the State, however 
distant, may be arrested and delivered to the military authorities in the 
martial zone, and his fate, whether liberty or life, depends on the action of a 
military commission, for I know of no principle which authorizes a military 
commission to impose the punishment of imprisonment that would not equally 
authorize the imposition of the punishment of death. Under that doctrine, 
should armed resistance to the Federal authority justifying a suspension of 
the writ of habeas corpus occur in Arizona a citizen could, on a charge of 
aiding the insurrection, be dragged from his home in Maine and delivered to 
the military authorities in Arizona for trial and punishment. 

The remedy suggested by the learned court, of impeachment by the legisla- 
ture, would hardly seem of much efficacy. By impeachment the governor 
could only be removed from office. He could not be further punished, however 
flagrant his opposition may have been, except by a perversion of the criminal 
law, for if the doctrine of the courts is correct he would not have exceeded his 
legal power. 

The governor might imprison or execute the members of the legislature, or 
even the learned judges of the supreme court themselves. 1 

The attention of the commission has also been directed by wit- 
nesses to the repeated occurrence of similar or, if possible, more ex- 
treme conditions in Colorado and Idaho, which testimony has been 
confirmed either by the investigations and hearings of the commis- 
sion or by the reports of responsible officials of the Federal Govern- 
ment. In Colorado martial law has been in effect ten times since 
1894. Similarly in Idaho martial law has been in effect on several 
occasions. In both of these States not only have strikers been impris- 
oned by military courts, but thousands have been held for long 
periods in u bull pens," hundreds have been forcibly deported from 
the State, and so arrogant have the troops become upon occasions 
that they have refused to obey the mandates of the civil courts, 
although the constitutions of both States provide that the military 
shall always be in strict subordination to the civil power. 2 In fact, 
on one occasion at least^ when orders of the court for the production 
of prisoners had been ignored and the military officers were sum- 
moned before the court, they surrounded the courthouse with in- 
fantry and cavalry, came into court accompanied by soldiers with 
fixed "bayonets, and stationed a gatling gun in a position command- 
ing the courthouse. 2 During the recent strike in Colorado the mili- 
tary was supreme and wielded its arbitrary power despotically and at 
times brutally. 

i . Twelfth, it is charged by the workers that in some localities the 
control by the employers of the entire machinery of government is 
so great that lawless acts on the part of agents of the employers go 
imheeded and unpunished, while vindictive action against the 
leaders of the strike is accomplished by methods unparalleled in 
civilized countries. It is seldom that evidence sufficient to substan- 
tiate such sweeping charges can be secured, even if the charges are 
true; but in the testimony and documents which have been gathered 
by the commission there seems to be conclusive proof that in one 
State at least, Colorado, such a condition of complete domination of 
the State government has prevailed and, it would seem, does still 

1 Address before New York State Bar Association, 1014. 
* Constitution of Colorado I, .">::. Constitution of Idaho I, 12. 

8 See report of U.'S. Commissioner of Labor, Carroll 1). \Vright, on Labor Disturbances 
in Colorado for a detailed history of events up to and including 1904. 


First, Hon. Frederick Farrar, attorney general of Colorado, tes- 
tified in substance as follows: 

As a result of a personal investigation into conditions in Las Animas and 
Huerfano Counties, Colo., in the summer of 1913, a very perfect political 
machine was found to exist. The head of this political machine is the sheriff, 
and it is conducted along lines very similar to those maintained by corrupt 
political organizations. It has a system of relief in case of need, and a system 
of giving rewards to its people. It was difficult to determine which was cause 
and which effect, but there was undoubtedly some relationship between the 
political machine and the coal companies. Witness believes the machine ex- 
isted through its power as a machine over the coal companies, but has no 
knowledge of any money being used. His investigation did not lead into 
question of whether the machine controlled coroners' juries in cases of death 
from accidents in mines, etc., or of whether mining laws were obeyed. 

Second, Hon. Thomas M. Patterson, formerly United States Sen- 
ator, testified : 

The men employed by the large mining companies have been used to gain 
political power. There is no doubt that it is the deliberate purpose of these 
companies to control the officials of the counties in which they are operating, 
and to have a great influence in the selection of judges and in the constitution 
of the courts. In this purpose they have been successful. Election returns 
from the two or three counties in which the large companies operate show 
that in the precincts in which the mining camps are located the returns are 
nearly unanimous in favor of the men or measures approved by the companies, 
regardless of party. The companies know whom they want elected, and do not 
hesitate, judging from the results, to make it known. 

Third, State Senator Helen Ring Robinson testified in substance 
as follows; 

As a member of the committee of privileges and elections, which investi- 
gated conditions in Las Animas County, she listened for three weeks to the 
story of political conditions there. Long before the strike was ordered she 
realized that the industrial situation was hopeless because the political situ- 
ation appeared hopeless. 

" I found that while the counties of Las Animas and Huerfano are geographi- 
cally a part of Colorado, yet industrially and politically they are a barony or a 
principality of the Colorado Fuel & Iron Co. Such situations, of course, must 
mean a knitting together of the industrial and political situation, and I don't 
wish to say that the Colorado Fuel & Iron Co. have limited their efforts to Las 
Animas and Huerfano Counties. If that were so, the situation in the State 
itself would not be so seriously affected by them; but they have in time past 
reached out beyond the boundaries of their principality and made and unmade 
governors; men who desire positions of high place in Colorado would be very 
loath to antagonize them whether they lived in Las Animas or Routt County, or 
in Denver, and it would not matter in that case to which political party they 

Attention should be called to another aspect of the control of the 
machinery of government by one class for the oppression of another. 
The scales of justice have in the past swung far in one direction- 
legislatures, courts, and administrative officers under the domination 
of corporations have grievously wronged the workers. There is 
grave danger that, if the workers assert their collective power and 
secure the control of government by the massing of their numbers, 
the scales may swing equally far in the other direction and every act 
of injustice, every drop of blood, every moment of anguish, be repaid 
in full, not upon some obscure and humble worker, but upon those 
who now glory in the sense of boundless power and security. 

In the few cases in which the workers have momentarily secured 
control of local situations, they have followed the examples that 


have been set and have in many instances used their power unjustly 
and oppressively. In Colorado, for example, during the strikes in 
the metal mines, where the Western Federation of Miners controlled 
a camp, they followed the example of the operators and deported 
persons whom they deemed to be obnoxious. Similarly, during the 
fight between two factions of the Western Federation of Miners in 
Butte, Mont., the dominant faction forced several persons to leave, 
the city and set aside the ordinary processes of law. It is inevitable 
that this should be the case, and it is remarkable only that the masses 
of workers, even when acting as mobs, show greater self-restraint 
than do organizations made up of business men ordinarily regarded 
as upright, respectable, and admirable citizens. 

For the security and honor of the Nation the scales of justice 
must be brought to a stable equilibrium. This can be accomplished 
only by a realization by every citizen that every act of injustice, 
whether done in far-off States or at one's very door, whether affect- 
ing a friend or an enemy, is in its consequences an invasion of one's 
own security and a menace to one's liberty. 

There is reason, however, to expect that no sober and well-consid- 
ered action for the removal of these abuses will be taken, and one 
may, without being an alarmist, share the fears expressed by Judge 
Seymour D. Thompson : x 

The dangerous tendencies and extravagant pretensions of the courts which 
I have pointed out ought not to be minimized, but ought to be resisted. Their 
resistance ought not to take place as advised by Jefferson, by " meeting the 
invaders foot to foot," but it ought to take place under the wise and moderate 
guidance of the legal profession, but the danger is that the people do not 
always so act. In popular governments evils are often borne with stolid 
patience until a culminating point is reached, when the people burst into sudden 
frenzy and redress their grievances by violent and extreme measures, and even 
tear down the fabric of government itself. There is danger, real danger, that 
the people will see at one sweeping glance that all the powers of their Govern- 
ment, Federal and State, lie at the feet of us lawyers, that is to say, at the feet 
of a judicial oligarchy ; that those powers are being steadily exercised in behalf 
of the wealthy and powerful classes, and to the prejudice of the scattered and 
segregated people; that the power thus seized includes the power of amend- 
ing the Constitution; the power of superintending the action, not merely of 
Congress, but also of the State legislatures ; the power of degrading the powers 
of the two Houses of Congress, in making those investigations which they may 
deem accessory to wise legislation, to the powers which an English court has 
ascribed to British colonial legislatures; * * holding that a venal legis- 
lature, temporarily vested with power, may corruptly bargain away those 
essential attributes of sovereignty and for all time; that corporate franchises 
bought from corrupt legislatures are sanctified and placed forever beyond 
recall by the people ; that great trusts and combinations may place their yokes 
upon the necks of the people of the United States, who must groan forever 
under the weight, without remedy and without hope ; that trial by jury and the 
ordinary criminal justice of the States, which ought to be kept near the people, 
are to be set aside, and Federal court injunctions substituted therefor; that 
those injunctions extend to preventing laboring men quitting their employ- 
ment, although they are liable to be discharged by their employers at any time, 
thus creating and perpetuating a state of slavery. There is danger that the 
people will see these things all at once; see their enrobed judges doing their 
thinking on the side of the rich and powerful; see them look with solemn 
cynicism iipon the sufferings of the masses, nor heed the earthquake when it 
begins to rock beneath their feet ; see them present a spectacle not unlike that 
of Nero fiddling while Rome burns. There is danger that the people will see 
all this at one sudden glance, and that the furies will then break loose and that 
all hell will ride on their wings. 

1 Address before State Bar Association of Texas, 1896. 


It is true that Judge Thompson spoke 19 years ago, but the real 
clanger lies in the fact that during that period we have done little to 
remove the evils cited by him, and that there is even reason to fear 
that we have simply moved nearer to the danger line instead of away 
from it. 

In considering the action which needs to be taken it has been urged 
by some that the end to be achieved is to place personal rights on a 
parity w^ith property rights. It is necessary to render a firm protest 
and warning against the acceptance of such an ideal. The establish- 
ment of property rights and personal rights on the same level can 
leave only a constant and ever-growing menace to our popular insti- 
tutions. With the acceptance of such an ideal our democracy is 
doomed to ultimate destruction. Personal rights must be recognized 
as supreme and of unalterable ascendency over property rights. 

Relief from these grave evils can not be secured by petty reforms. 
The action must be drastic and directed at the roots from which these 
evils spring. 

With full recognition of the gravity of the suggestions, it seems 
necessary to urge the commission to make the following recom- 
mendations : 

1. That Congress forthwith initiate an amendment to the Consti- 
tution providing in specific terms for the protection of the personal 
rights of every person in the United States from encroachment by 
the Federal and State Governments and by private individuals, asso- 
ciations, and corporations. The principal rights which should be 
thus specifically protected by the' power of the Federal Government 
are the privilege of the writ of habeas corpus, the right to jury trial, 
to free speech, to peaceful assemblage, to keep and bear arms, to be 
free from unreasonable searches and seizures, to speedy public trial, 
and to freedom from excessive bail and from cruel and unusual pun- 

2. That Congress immediately enact a statute or, if deemed neces- 
sary, initiate a constitutional amendment, specifically prohibiting the 
courts from declaring legislative acts unconstitutional. 

3. That Congress enact that in all Federal cases where the trial is 
by jury, all qualified voters in the district shall be included in the 
list from which jurors are selected, and that they shall be drawn by 
the use of a wheel or other device designed to promote absolute im- 

4. That Congress drastically regulate or prohibit private detective 
agencies doing business in more than one State, employed by a com- 
pany doing an interstate business, or using the mails in connection 
with their business. Such regulation, if it is feasible, should include 
particularly the limitation of their activities to the bona fide func- 
tions of detecting crime, and adequate provision should be made for 
the rigid supervision of their organization and personnel. 


The previous discussion of the'causes of industrial unrest has dealt 
with the denial of certain fundamentals to which the workers believe 
they have natural and inalienable rights, namely, a fair distribution 
of the products of industry, the opportunity to earn a living, free 
access to unused land and natural resources, and just treatment by 


legislators, courts, and executive officials. A more serious and funda- 
mental charge is, however, contained in the allegation by the workers 
that in spite of the nominal legal right which has been established by 
a century-long struggle, almost insurmountable obstacles are placed 
in the way of their using the only means by which economic and 
political justice can be secured, namely, combineo^ action through vol- 
untary organization. The workers insist that this right of organiza- 
tion is fundamental and necessary for their freedom, and that it is 
inherent in the general rights guaranteed every citizen of a democ- 
racy. They insist that " people can free themselves from oppression 
only by organized force. No people could gain or maintain their 
rights or liberties acting singly, and any class of citizens in the State 
subject to unjust burdens or oppression can gain relief only by 
combined action." 

The demand for organization and collective action has been mis- 
understood, it is claimed, because of the belief among a large number 
of citizens that its purpose was simply to secure better wages and 
better physical conditions. It has been urged., however, by a large 
number of witnesses before the commission that this is a complete 
misconception of the purposes for which workers desire to form 
organizations. It has been pointed out with great force and logic 
that the struggle of labor for organization is not merely an attempt 
to secure an increased measure of the material comforts of life, but is 
a part of the age-long struggle for liberty; that this struggle is 
sharpened by the pinch of hunger and the exhaustion of body and 
mind by long hours and improper working conditions ; but that even 
if men were well fed they would still struggle to be free. It is not 
denied that the exceptional individual can secure an economic suffi- 
ciency either by the sale of his unusual ability or talent or by syco- 
phantic subservience to some person in authority, but it is insisted 
that no individual can achieve freedom by his own efforts. Simi- 
larly, while it is admitted that in some cases exceptional employers 
treat their employees with the greatest justice and liberality, it is 
held to be a social axiom that no group of workers can become free 
except by combined action, nor can the mass hope to achieve any 
material advance in their condition except by collective effort. 

Furthermore, it is urged by the representatives of labor that the 
efforts of individuals who are bent upon bettering their own condi- 
tion without reference to their health or to the interests of others 
directly injure each of their fellow workers and indirectly weaken the 
whole fabric of society. 

It is also pointed out that the evolution of modern industry has 
greatly increased the necessity for organization on the part of wage 
earners. While it is not admitted that the employer who has only 
one employee is on an economic equality with the person who is 
employed by him, because of the fact that the employer controls the 
means of livelihood, which gives him an almost incalculable advan- 
tage in an}' bargain, nevertheless this condition of inequality is held 
to have been enormously increased by the development of corpora- 
tions controlling the livelihood of hundreds of thousands of em- 
ployees and by the growth of employers' associations whose members 
act as a unit in questions affecting their relations with employees. 

There have been many able and convincing expositions of this 
belief by witnesses before the commission, but there is no other which 


seems to have so completely covered the entire field as the testimony 
of Mr. Louis D. Brandeis, who, as he stated, has studied this problem 
from the standpoint both of employers and of employees : 

My observation leads me to believe that while there are many single things 
single causes contributing causes to unrest, that there is one cause which is 
fundamental, and it is the necessary conflict between the contrast between 
our political liberty and the industrial absolutism. 

We are as free politically, perhaps, as it is possible for us to be. Every man 
has his voice and his vote, and the law has endeavored to enable, and has suc- 
ceeded practically in enabling, him to exercise his political franchise without 
fear. He, therefore, has his part, and he certainly can secure an adequate part 
of the government of the country in all of its political relations in all rela- 
tions which are determined by legislation or governmental administration. 
On the other hand, in dealing with industrial problems the position of the 
ordinary worker is exactly the reverse. And the main objection, as I see it, to 
the large corporation is that it makes possible and in many cases makes in- 
evitable the exercise of industrial absolutism. It is not merely the case of 
the individual worker against employer, which, even if he is a reasonably 
sized employer, presents a serious situation calling for the interposition of 
a union to protect the individual. But we have the situation of an employer 
so potent, so \vell organized, with such concentrated forces and with such ex- 
traordinary powers of reserve and the ability to endure against strikes and 
other efforts of a union, that the relatively loosely organized masses of even 
strong unions are unable to cope with the situation. 

We are dealing here with a question not of motive, but of condition. Now, 
the large corporations and the managers of the large corporations of the 
powerful corporations are probably, in a large part, actuated by motives just 
the same as an employer of one-tenth of their size. Neither of them, as a 
rule, wishes to have his liberty abridged ; but the smaller concern usually comes 
to the conclusion that it is necessary that it should be where there is an im- 
portant union found. But when you have created a great power, when there 
exist these powerful organizations who can afford not only can successfully 
summon forces from all parts of the country to use tremendous amounts of 
money in any conflict to carry out what they deem to be their business prin- 
ciples, you have necessarily a condition of inequality between the two con- 
tending forces. The result is that contests, doubtless undertaken with the best 
of motives and with strong convictions of what is for the best interests not 
only of the company but of the community, leads to absolutism. In all cases 
of these large corporations the result has been to develop a benevolent abso- 
lutism an absolutism all the same ; and it is that which makes the great corpo- 
ration so dangerous. It is because you have created within the State a state 
so powerful that the ordinary forces existing are insufficient to meet it. 

Now, to my mind the situation of the worker that is involved and I noted, 
Mr. Chairman, that when you put the question you put the question of physical 
condition unrest, in my mind, never can be removed, and, fortunately never 
can be removed by the mere improvement of the physical and material con- 
ditions of the working man. If it were we should run great risk of improving 
their material conditions and reducing their manhood. We must bear in mind 
all the time that however much we may desire material improvement and 
must desire it for the comfort of the individual, we are a democracy ; and that 
we must have above all things men ; and it is the development of manhood to 
which any industrial and social system must be directed. We are committed 
not only to social justice in the sense of avoiding things which bring suffering 
and harm and unequal distribution of wealth, but we are committed primarily 
to democracy, and the social justice to which we are headed is an incident of 
our democracy, not an end itself. It is the result of democracy, but de- 
mocracy we must have. And, therefore, the end to which we must move is a 
recognition of industrial democracy as the end to which we are to work, and 
that means this: It means that the problems are not any longer, or to be 
any longer, the problems of the employer. The problems of his business it is 
not the employer's business. The union can not shift upon the employer the 
responsibility for the conditions, nor can the employer insist upon solving, 
according to his will, the conditions which shall exist ; but the problems which 
exist are the problems of the trade ; they are the problems of the employer and 
the employee. No possible degree of profit sharing, however liberal, can meet 


the situation. That would be again merely dividing the proceeds of business. 
That might do harm or it might do good, dependent on how it is applied. 

No mere liberality in the division of the proceeds of industry can meet this 
situation. There must be a division not only of the profits, but a division of 
the responsibilities; and the men must have the opportunity of deciding, in 
part, what shall be their condition and how the business shall be run. They 
also, as a part of that responsibility, must learn that they must bear the results, 
the fatal results, of grave mistakes, just as the employer. But the right to 
assist in producing the results, the right, if need be, the privilege of making 
mistakes, is a privilege which can not be denied to labor, just as we must insist 
on their sharing the responsibilities for the result of the business. 

Now, to a certain extent we get that result are gradually getting it in 
smaller businesses. The grave objection to the large business is that almost 
inevitably, from its organization, through its absentee stockholdership, through 
its remote directorship, through the creation practically of stewards to take 
charge of the details of the operation of the business and coming into direct 
relation with labor, we lose that necessary cooperation which our own aspira- 
tions American aspirations of democracy demand. And it is in that, in my 
opinion, that we will find the very foundation of the unrest; and no matter 
what is done with the superstructure, no matter how it may be improved one 
way or the other, unless we reach that fundamental difficulty, the unrest will 
not only continue, but in my opinion will grow worse. 

It is very significant that out of 230 representatives of the interests 
of employers, chosen largely on the recommendations of their own 
organizations, less than half a dozen have denied the propriety of 
collective action on the part of employees. A considerable number 
of these witnesses have, however, testified that they denied in prac- 
tice what they admitted to be right in theory. A majority of such 
witnesses were employers who in the operation of their business 
maintained what they, in accordance with common terminology, 
called the " open shop." The theory of the " open shop," according 
to these witnesses, is that workers are employed without any refer- 
ence to their membership or nonmembership in trade unions; while, 
as a matter of fact, it was found upon investigation that these em- 
ployers did not, as a rule, willingly or knowingly employ union 
men. Nevertheless, this is deemed by the commission to be a minor 
point. The " open shop," even if union men are not discriminated 
against, is as much a denial of the right of collective action as is the 
" anti union shop." In neither is the collective action of employees 
permitted for the purpose of negotiating with reference to labor con- 
ditions. Both in theory and in practice, in the absence of legisla- 
tive regulation, the working conditions are fixed by the employer. 

It is evident, therefore, that there can be at best only a benevolent 
despotism where collective action on the part of the employees does 
not exist. 

A great deal of testimony has been introduced to show that em- 
ployers who refuse to deal collectively with their workmen do in fact 
grant audiences at which the grievances of their workmen may be 
presented. One is repelled rather than impressed by the insistence 
with which this idea has been presented. Every tyrant in history 
has on stated days granted audiences to which his faithful subjects 
might bring their complaints against his officers and agents. At 
these audiences, in theory at least, even the poorest widow might be 
heard by her sovereign in her search for justice. That justice was 
never secured under such conditions, except at the whim of the 
tyrant, is sure. It is equally sure that in industry justice can never 
be attained by such a method. 


The last point which needs to be considered in this connection is 
the attitude frequently assumed by employers that they are per- 
fectly willing to deal with their own employees collectively, but will 
resist to the end dealing with any national organization, and resent 
the intrusion of any persons acting for their employees who are not 
members of their own labor force. In practice these statements have 
been generally found to be specious. Such employers as a rule op- 
pose any effective form of organization among their own employees 
as bitterly as they fight the national unions. The underlying motive 
of such statements seems to be that as long as organizations are un- 
supported from outside they are ineffective and capable of being 
crushed with ease and impunity by discharging the ringleaders. 
Similarly, the opposition to the representation of their employees 
by persons outside their labor force seems to arise wholly from the 
knowledge that as long as the workers' representatives are on the 
pay roll they can be controlled, or, if they prove intractable they 
can be effectually disposed of by summary dismissal. 

To suggest that labor unions can be effective if organized on less 
than a national scale seems to ignore entirely the facts and trend 
of present-day American business. There is no line of organized in- 
dustry in which individual establishments can act independently. 
Ignoring for the time the centralization of control and ownership, 
and also the almost universal existence of employers' associations, 
the mere fact of competition would render totally ineffective any or- 
ganization of employees which was limited to a single establishment. 
Advance in labor conditions must proceed with a fair degree of uni- 
formity throughout any line of industry. This does not indeed re- 
quire that all employees in an industry must belong to a national 
organization, for experience has shown that wherever even a con- 
siderable part are union members, the advances which they secure 
are almost invariably granted by competitors, even if they do not 
employ union men, in order to prevent their own employees from 

The conclusions upon this question, however, are not based upon 
theory, but upon a thorough investigation of typical situations in 
which the contrast between organization and the denial of the right 
of organization could best be studied. The commission has held 
public hearings and has made thorough investigations in such in- 
dustrial communities as Paterson, N. J., Los Angeles, Cal., Lead, 
S. Dak., and Colorado, where the right of collective action on the 
part of employees is denied. These investigations have shown that 
under the best possible conditions, and granting the most excellent 
motives on the part of employers, freedom does not exist either 
politically, industrially, or socially, and that the fiber of manhood 
will inevitably be destroyed by the continuance of the existing situ- 
ation. Investigations have proved that although the physical and 
material conditions may be unusually good, as, for example, in 
Lead, S. Dak., they are the price paid for the absolute submission 

I of the employees to the will of the employing corporation. Such 
conditions are, moreover, shown by the hearings of the commission 
and by the investigations of its staff to be unusual. Los Angeles, 
for example, although exceptionally endowed in location, climate, 
and natural resources, was sharply criticized for the labor conditions 
38819 16 5* 


which had developed during its " open shop " regime even by Mr. 
Walter Drew, representing several of the largest associations which 
contend for the "open shop." It is significant that the only claim 
ordinarily made for the conditions in such establishments or locali- 
ties is that " they are as good as are secured by the union." As a 
matter of fact, there are few establishments which make this boast, 
and in the majority the conditions were found to be far below any 
acceptable standards. 

The commission has also, through public hearings and the inves- 
tigations of its staff, made a thorough and searching investigation of 
the conditions in those industries and establishments where collective 
action, through the medium of trade unions and joint agreements, 
exists. It has not been found that the conditions in such industries 
are ideal, nor that friction between employers and the unions is un- 
known ; nor has it been found that the employees in such industries 
have entirely achieved economic, political, and industrial freedom, for 
these ideals can not be gained until the fundamental changes in our 
political and economic structure, which have already been referred to, 
have in some way been accomplished. It has been found, however, 
that the material conditions of the workers in such industries and 
establishments are on a generally higher plane than where workers 
are unorganized; that important improvements in such conditions 
have been achieved as the direct result of organization ; that the friction 
which exists in such industries and establishments has been reduced 
rather than increased by organization ; and that the workers at least 
have secured a basis upon which their political and economic freedom 
may ultimately be established. 

The evils of graft, " machine politics," factional fights, and false 
leadership, which have been found sometimes to exist in such organ- 
ized industries, are those which are inevitable in any democratic form, 
of organization. They are the same evils which have accompanied 
the development of the American Nation, and of its States and 
municipalities. Such evils as we have found to exist are indeed 
to be condemned, but a study of the history of these organizations 
seems to show clearly that there is a tendency to eradicate them as 
the organizations become stronger and as the membership becomes 
more familiar with the responsibilities and methods of democratic 
action. Furthermore, there is a fundamental principle which applies 
in this field as in all other lines of human activity. This principle 
is contained in the following contrast: In democratic organizations 
such evils and excesses as may arise tend to disrupt and destroy the 
organization and are therefore self -eradicating; while in an au- 
tocracy, evils and excesses tend inevitably to strengthen the existing 
autocrat and can be eradicated only in the event of a revolt on the 
part of those who suffer from such evils. This is the history not 
only of every form of artificial association, but of nations. 

The fundamental question for the Nation to decide, for in the end 
public opinion will control here as elsewhere, is whether the workers 
shall have an effective means of adjusting their grievances, improv- 
ing their condition, and securing their liberty, through negotiation 
with their employers, or whether they shall be driven by necessity 
and oppression to the extreme of revolt. Where men are well or- 
ganized, and the power of employers and employees is fairly well 
balanced, agreements are nearly always reached by negotiation; but, 


even if this fails, the strikes or lockouts which follow are as a rule 
merely cessations of work until economic necessity forces the parties 
together again to adopt some form of compromise. With the unor- 
ganized there is no hope of achieving anything except by spon- 
taneous revolt. Too often has it been found that during the delay 
of attempted negotiations the leaders are discharged and new men 
are found ready to take the place of those who protest against condi- 
tions. Without strike funds or other financial support the unor- 
ganized must achieve results at once ; they can not afford to wait for 
reason and compromise to come into play. Lacking strong leaders 
and definite organization, such revolts can only be expected to change 
to mob action on the slightest provocation. 

Looking back over the industrial history of the last quarter cen- 
tury, the industrial disputes which have attracted the attention of 
the country and which have been accompanied by bloodshed and 
violence have been revolutions against industrial oppression, and 
not mere strikes for the improvement of working conditions.^ Such 
revolutions in fact w r ere the railway strikes of the late eighties, the 
Homestead strike, the bituminous coal strike of 1897, the anthracite 
strikes of 1900 and 1903, the strike at McKees Rocks in 1909, the 
Bethlehem strike of 1910, the strikes in the textile mills at Lawrence, 
Paterson, and Little Falls, many of the strikes in the mining camps 
of Idaho and Colorado, the garment workers' strikes in New York 
and other cities, and the recent strikes in the mining districts of West 
Virginia, Westmoreland County, Pa., and Calumet, Mich. 

As a result, therefore, not only of fundamental considerations but 
of practical investigations, the results of which are described in detail 
hereinafter, it would appear that every means should be used to 
extend and strengthen organizations throughout the entire industrial 
field. Much attention has been devoted to the means by which this 
can best be accomplished, and a large number of suggestions have 
been received. As a result of careful consideration, it is suggested 
that the commission recommend the following action : 

1. Incorporation among the rights guaranteed by the Constitution 
of the unlimited right of individuals to form associations, not for the 
sake of profit but for the advancement of their individual and col- 
lective interests. 

2. Enactment of statutes specifically protecting this right and pro- 
hibiting the discharge of any person because of his membership in a 
labor organization. 

3. Enactment of a statute providing that action on the part of an 
association of individuals not organized for profit shall not be held to 
be unlawful where such action would not be unlawful in the case of 
an individual. 

4. That the Federal Trade Commission be specifically empowered 
and directed by Congress, in determining unfair methods of compe- 
tition to take into account and specially investigate the unfair treat- 
ment of labor in all respects, with particular reference to the follow- 
ing points : 

(a) Refusal to permit employees to become members of labor or- 

(?>} Refusal to meet or confer with the authorized representatives 
of employees. 


5. That the Department of Labor, through the Secretary of Labor 
or any other authorized official, be empowered and directed to present 
to the Federal Trade Commission, and to prosecute before that body 
all cases of unfair competition arising out of the treatment of labor 
"which may come to its attention. 

6. That such cases, affecting as they do the lives of citizens in the 
humblest circumstances, as well as the profits of competitors and the 
peace of the community, be directed by Congress to have precedence 
over all other cases before the Federal Trade Commission. 


The remainder of the report is devoted largely to the conclusions 
and recommendations with respect to specific questions propounded 
by Congress. The facts upon which these conclusions and recom- 
mendations are based are contained in the testimony taken by the 
commission and in the reports of its investigators. The complete 
corrected testimony is transmitted to Congress, as well as a carefully 
prepared digest or the evidence. The reports of the investigators 
have likewise been placed in the possession of Congress. 1 



In this section only the conditions of adult workmen are consid- 
ered, leaving the questions affecting women and children for separate 
consideration later. The problems involved are essentially different, 
and the position of women and children in relation to the State may 
be clearly distinguished from the position of adult workmen. 


As a result of the investigations which have been made the follow- 
ing conclusions are justified : 

1. The welfare of the State demands that the useful labor of every 
able-bodied workman should, as a minimum, be compensated by suf- 
ficient income to support in comfort himself, a wife, and at least three 
minor children, and in addition to provide for sickness, old age, and 
disability. Under no other conditions can a strong, contented, and 
efficient citizenship be developed. 

'2. Under existing conditions such an income is not received by 
fully one-half of the wage earners employed in industry. 

3. The natural resources of the United States are such that an 
industrial population properly educated and efficiently organized can 
produce enough to achieve this standard of living. 

4. It is probable that even at present the national agricultural and 
industrial output is sufficient to permit the establishment of such a 

5. The problem is therefore essentially one of distribution. 

6. The fixing of the wages of adult workmen by legal enactment is 
not practicable nor desirable as a general policy, except for public 

7. A just standard of wages in any industry or occupation can best 
be reached by collective bargaining between employers and employees 

1 These reports have not been printed with this document, on the recommendation of 
Chairman Frank P. Walsh, as stated in his letter in Senate Report No. 143, Sixty-fourth 


for the purpose of forming voluntary joint agreements. The success 
and justice of such joint agreements is, however, dependent upon the 
essential equality of the two parties and can not be attained unless 
effective organization exists. 

It is suggested that the commission make the following recom- 
mendations : 

1. In order that the public may be kept fully informed with regard 
to labor conditions, and that a proper basis of facts should exist for 
negotiation and arbitration, the Federal Government should enact 
the necessary legislation to provide for the collection, through the 
Bureau of Labor Statistics or otherwise, of the full and exact facts 
regarding wages, hours of labor, and extent of unemployment for 
every industry. Every employer should be required by law to file 
with the proper authority a sworn statement of these facts according 
to a prescribed form. These statistics should be published annually, 
and the full data regarding any industry or plant should be accessible 
to any mediator or any other responsible citizen. 

2. Uniform statutes should be passed by the legislatures of all 
States requiring that wages be paid at least semimonthly and in cash, 
except where by joint agreement other methods are agreed upon. 


As a result of investigation the following conclusions are justified: 

1. The physical well-being, mental development, and recreational 
needs of every class of population demand that under normal circum- 
stances the working day should not exceed eight hours. 

2. A very large percentage of the workmen in manufactures, 
transportation, and mining work more than eight hours per day. 

3. This is in marked contrast to the condition of those whose 
economic position enables them to define the length of their own 
working day. 

4. Practical experience has shown that the reduction of working 
hours is in the interest not only of the worker and the community 
generally, but of the employer. 

5. The regulation by legal enactment of working hours of adult 
workmen is not generally practicable nor desirable, except for public 

It is suggested that the commission recommend : 

1. That in the so-called continuous occupations, other than the 
movement of trains, requiring work during both the day and the 
night for six or seven days per week, the State and Federal Govern- 
ments should directly intervene, so that the working hours should not 
exceed eight per day nor extend to more than six days per week. 


The investigations which have been made warrant the following 
conclusions : 

1. Great progress has been made during recent years in promoting 
safety and sanitation in manufacturing, mining, and transportation. 

2. The progress has been most rapid in the direction of safeguard- 
ing workers from industrial accidents. 


3. Progress in safety has been in part the result of continued 
agitation and education, but has proceeded most rapidly and satis- 
factorily since the enactment of workmen's compensation laws, which 
render unsafe working conditions expensive to the employer. 

4. The movement has also been largely promoted by the forma- 
tion of safety committees composed of officials and workmen, and 
by the creation of joint conferences of employers and employees to 
assist and advise State officials in the administration of the law and 
in the formulation of safety rules. 

5. The campaign for safety needs, however, to be greatly ex- 
tended as rapidly as possible. The annual list of accidents, approxi- 
mately 35,000 fatalities and 700,000 injuries involving disability of 
over four weeks, can not be regarded complacently. From one-third 
to one-half of these accidents have been estimated by competent au- 
thorities to be preventable by proper safeguards, inspection, and 

6. The advance in the sanitation of workshops has been less rapid, 
because not only are the dangers less obvious, but there is no financial 
liability for diseases or deaths occurring as the result of improper 
sanitation. Future progress in sanitation demands attention not 
only to cleanliness and ventilation but to occupational diseases. 

7. The most direct incentive for the promotion of sanitation would 
be the adoption of a proper system of sickness insurance. 

It is suggested that the commission recommend : 

1. The creation of a bureau of industrial safety (except that the 
section providing a museum of safety is not indorsed). Proper steps 
should be taken to provide for the coordination of the work of all 
Federal bureaus whose work is concerned with industrial safety. 

2. The appropriations of the Public Health Service for the investi- 
gation and promotion of industrial sanitation should be increased. 


It has been found in the course of the commission's investigations : 

1. The present provisions for the housing of workmen are gen- 
erally bad, not only in the large cities but in industrial communities 
of every size and in rural districts. 

2. Xot only are the houses and tenements which are available for 
workers largely insanitary and unfit for habitation but they are in- 
adequate, resulting in high renjs, overcrowding, and congestion. 

3. Such conditions make not only for discomfort and unhappiness, 
but for disease and degeneration. 

4. The ordinary method of supplying houses through their erec- 
tion by private capitalists for investment and speculation has rarely, 
if ever, been adequate. 

5. Excellent plans for the housing of workmen have been put into 
effect by a number of firms and corporations, but such measures have 
not at all affected the general situation, and being dependent upon 
the volition of individuals can not be regarded as likely to greatly 
influence progress. 

6. The tenement-house acts, as well as the health ordinances and 
building regulations of municipalities, while generally productive 
of good effects, are at best surface remedies and can never cure the 
evils of the present housing situation. 


7. In every important European country Government aid and 
direct intervention to curb speculation have proved to be necessary 
for the promotion of any real progress. 

8. Governmental action in Europe has chiefly taken the following 
forms : 

(a) Extension of credit to voluntary nonprofit-making associa- 

(&) Construction by the Government of buildings which are 
leased for long periods on easy terms. 

(c) Exemption from taxation and other subsidies for homes con- 
structed for occupancy by their owners. 

(d) Legislation designed to prevent the holding of land out of 
use and to secure for the Government a part of the " unearned in- 

It is suggested that the commission recommend : 

1. The Federal and State Governments should institute investiga- 
tions directed not so much to ascertaining existing housing condi- 
tions as to formulating constructive methods by which direct sup- 
port and encouragement to the promotion of improved housing can 
be given. Actual experiment in the promotion of housing should 
proceed as rapidly as proper plans can be drafted. 

2. Special attention should be given to taxation, in order that land 
should as far as possible be forced into use and the burden of taxa- 
tion be removed from home owners. 

3. The municipalities should be relieved from all State restrictions 
which now prevent them from undertaking the operation of adequate 
housing schemes and from engaging in other necessary municipal 


The investigations and hearings of the commission justify the 
conclusions : 

1. As a result of their unprotected condition, women and children 
are exploited in industry, trade, domestic service, and agriculture 
to an extent which threatens their health and welfare and menaces 
the well-being of future generations. 

2. The competition of women and children is a direct menace to 
the wage and salary standards of men. 

3. Under present conditions, children are permitted by their par- 
ents to go to work largely because their earnings are necessary for 
the support of the rest of the family. The restrictive legislation of 
the past quarter century, although admirable in purpose and ultimate 
results, has thrown a heavy burden upon the fathers and mothers, 
who, at existing wages, have been barely able to support their fami- 
lies. The evidence shows that the burden of child-labor legislation 
has rested upon the wage earners rather than upon employers. It 
is the testimony of enlightened employers that the employment of 
children is unprofitable, and that the effect of excluding children 
from factories has been to increase rather than decrease profits. 
In the interests of society as a whole : further restrictions on the em- 
ployment of immature children are necessary, but it is important that 
they should be made with an understanding that the burden will rest 
primarily upon the wage earners, whose self-sacrifice should be fully 


4. The increasing employment of women has been due to two pri- 
mary causes : First, the low wages of men, which have made the earn- 
ings of women necessary for the support of the family, and, second, 
the inducement to employers to substitute women for men because 
they will accept lower wages and are less likely to protest against 
conditions. The substitution of women for men has been greatly 
assisted by the introduction of improved machinery, which makes 
strength and technical skill unnecessary. 

5. The increased employment of women under present working 
conditions is a serious menace to their own health and well-being, 
to the wages of their husbands and brothers, and to the ideals of 
family life upon which American civilization has been established. 

6. The conditions under which women are employed in domestic 
service and in agriculture merit the attention of the Nation no less 
than does their employment in manufacturing and trade. Not only 
is the economic condition of women employed in agriculture and 
domestic service a matter of grave concern, but they are subject to 
overwork, unreasonable hours, and personal abuse of various kinds, 
from which they have been largely relieved in factories and stores 
through agitation and legislation. 

7. The position of women in industry has been rendered doubly 
hard by reason of their lack of training for industrial work, by the 
oversupply of such labor and the consequent competition, by their 
traditional position of dependence, and by their disfranchisement. 

8. A very thorough investigation in the 'New England States failed 
to show a single manufacturer who had left a State as a result of 
restrictive factory legislation. On the contrary, the majority of 
manufacturers expressed the opinion that the legislation regulat- 
ing conditions for women and children had been advantageous to 
the industry as a whole, particularly because it placed all competi- 
tors upon the same footing. Similarly an investigation of the 
effects of minimum-wage legislation failed to show any calculable 
effects upon the cost of production or upon the employment of women 
after a sufficient period had elapsed to allow the necessary readjust- 
ments to be made. 

9. Nevertheless, there is a strong and increasing demand on the 
part of manufacturers in the more progressive States that regula- 
tion of factory conditions should be undertaken by the Federal Gov- 
ernment, in order that competitors in all parts of the country should 
be placed upon an equal footing in this respect. The same demand 
comes also from the representatives of labor not only because the 
argument of " interstate competition " is creating strong opposition 
to progressive legislation, but because of the great economy of effort 
which would result from having to make the fight for better legisla- 
tion only at the National Capital instead of in 45 States. 

It is suggested that the commission recommend : 

1. The recognition both by public opinion and in such legislation 
as may be enacted of the principle that women should receive the 
same compensation as men for the same terms. 

2. Until this principle is recognized and women are accorded equal 
political rights, the extension of State protection of women, through 
legislation regulating working conditions, hours of service, and 
minimum wages, is highly desirable. 


3. The increased organization of working women for self -protec- 
tion and the improvement of their industrial conditions. 

4. The inclusion of all women w r orking for wages, whether in in- 
dustry, trade, domestic service, or agriculture, under future legisla- 
tion regulating their wages, hours, or working conditions. 

5. The extension of the principle of State protection of children 
and the rapid increase of facilities for their education as outlined 

6. The enactment by Congress of legislation embodying the prin- 
ciples contained in the so-called Palmer-Owen bill, which was before 
Congress at the last session. 



The investigations of the commission show : 

1. The scope of the Newlands Act, which applies only to employees 
engaged in the operation of interstate railroads, is top narrow and 
leaves the public service in the transmission of intelligence and in 
the handling of interstate commerce likely to be interrupted by 
labor disputes without any adequate legal provision either for 
mediation and conciliation or for making the facts involved in the 
dispute known to the public. 

2. Even as applied to train-service employees, the Newlands Act 
provides no means of bringing the facts before the public, except 
when both sides agree to arbitration. 

3. The selection of impartial members of arbitration boards has 
almost without exception devolved upon the Board of Mediation 
and Conciliation, owing to the inability of the parties to agree. This 
not only imposes an unpleasant and burdensome task upon the Board 
of Mediation and Conciliation, but tends greatly to weaken its in- 
fluence. The experience in Great Britain shows that agreement can 
be reached by joint conference of employers and employees during 
a period of industrial peace for the selection of a panel of impartial 
persons from which arbitrators can be selected when they are needed, 
and seems to indicate that in the United States the inability of the 
parties to agree upon impartial arbitrators is due in part at least to 
the fact that they are always selected during the heat of the conflict. 

It is suggested that the commission recommend : 

1. The extension of the Newlands Act to cover not only all classes 
of railroad employees, but all employees of public-service corpora- 
tions which are engaged in interstate commerce. 

2. The functions of the Board of Mediation and Conciliation 
under the Newlands Act should be extended to provide for the 
creation of boards of investigation, to be formed only by consent of 
both parties and to make a report of facts and recommendations 
which will not be binding upon either side. 

3. The Board of Mediation and Conciliation should be authorized 
by Congress to create an advisory council, composed of equal num- 
bers of employers and employees, for the purpose of creating a panel 
of names from which impartial arbitrators may be chosen by the 
Board of Mediation and Conciliation. 



The investigations and hearings of the commission justify the 
following conclusions : 

1. The workers employed by the two principal telegraph com- 
panies (the Western Union Telegraph and the Postal Telegraph- 
Cable) are not only underpaid, as admitted by the highest officials 
in their testimony before the commission, but subject to many abuses, 
such as the denial of proper periods of relief while on duty; the 
establishment of arbitrary speed rates, which frequently result in 
overstrain; the arbitrary discharge of employees without notice for 
any cause or no cause ; the employment of young boys for messenger 
service under conditions which can result only in their moral cor- 
ruption; and the employment of women for telegraph service at 

2. Such conditions have existed practically without change at least 
since 1884, in spite of the facts having been made public by three 
Government investigations. 

3. The workers are practically unable to improve their condition 
because these two companies, which control practically the entire 
industry, deny them the right of organization. The suppression of 
organization is effectively carried out by the discharge of all known 
to be union men or union sympathizers, by the use of spies who 
fraudulently secure the confidence of employees and report all known 
to be union members or sympathizers, by the use of an effective sys- 
tem of blacklisting, and by the control even of the personnel of the 
operators upon leased wires in the offices of brokers and other private 

4. The two companies have a monopoly of the transmission of tele- 
grams, and no effective competition exists between them. These com- 
panies are performing a service in the transmission of intelligence 
which has been held by the Federal Supreme Court to have been 
reserved by the Constitution specifically to the Federal Government. 

5. The telegraph companies are enormously overcapitalized, and 
their rates, which are graded to pay dividends upon large amounts 
of stock which do not represent the investment of cash, are very much 
higher than the cost of service warrants. 

6. Owing to the duplication of offices on the part of the two com- 
panies and the maintenance of branch offices which are idle for a 
large part of the time, this service is being performed inefficiently 
and at an unusually high cost in spite of the low wages paid the 

It is suggested that the commission recommend : 

1. The property of the telegraph companies or such part of their 
equipment as may be necessary for the efficient operation of a na- 
tional telegraph system should be purchased by the Federal Govern- 
ment after proper valuation and placed under the general jurisdic- 
tion of the Post Office Department for operation. 1 In transferring 
the service to the Federal Government all employees, including offi- 
cials and other persons, necessary for successful operation should be 
retained, and those whom the elimination of the duplicate service 
of 'the two companies renders unnecessary for the national system 

1 The economic argument for the postalization of telegraphs and telephones is pre- 
sented in the testimony of Hon. David J. Lewis before the commission. 


should be absorbed into other branches of the Federal service as far 
as practicable. 

2. At the time of the transfer to the Federal service a special com- 
mission should be appointed to revise the salary ratings and other 
working conditions and place them upon a proper basis. 


The investigations of the commission are the basis for the follow- 
ing statements: 

1. The condition of the telephone operators in both interstate and 
local service is subject to grave criticism. The wages paid even in 
the cities having the highest standards are insufficient to provide 
decently for women who have no other means of support. The re- 
quirements and nervous strain incident to the service are so very 
severe that experienced physicians have testified that operators 
should work not more than five hours per day, whereas the regular 
working hours are from seven to nine per day. The operators, who 
are principally girls and young women, are required to work at night, 
going to and returning from their work at hours when they are 
subject to grave menace. The policy of the companies in general 
provides for sanitary and reasonably comfortable working places 
and for attention to the recreation and physical needs of the oper- 
ators, but in a number of cities the conditions even in these respects 
are subject to severe criticism. 

2. The telephone operators are unable to secure reasonable condi- 
tions for themselves because of their youth and the fact that they 
ordinarily remain in the service only a short time. 

3. The organization of employees for their own protection is effec- 
tively resisted by the employing companies. 

4. The American Telephone & Telegraph Co., with its subsidiary 
and affiliated corporations, controls more than 70 per cent of the 
total telephone business of the country. The American Telephone & 
Telegraph Co. has been enormously profitable and is well able to 
afford the necessary improvements in working conditions. The 
American Telephone & Telegraph Co. has increased its capitaliza- 
tion enormously without the investment of new capital. 

5. The transaction by which the American Telephone & Telegraph 
Co., which had been a subsidiary of the American Bell Telephone 
Co., absorbed the parent company in 1899 was not only designed to 
evade the legal limitations contained in the Massachusetts charter of 
the American Bell Telephone Co., but resulted in the increase of the 
capitalization of the combination from $25,886,300 to $75,276,600 
without the addition of any new capital. 

6. The transmission of intelligence is a function which is spe- 
cifically reserved by the Constitution to the Federal Government, 
but which in the telephone field has been permitted to become the 
practical monopoly of a single corporation. 

It is suggested that the commission recommend : 

1. The purchase by the Federal Government, after proper valua- 
tion, of the property of the interstate and local telephone companies, 
or such part of their equipment as may be necessary for the efficient 
operation of a national telephone system. 


2. The transfer of all employees, including officials, necessary for 
the efficient operation of the national telephone system to the Federal 
service, as far as possible, and the absorption, as far as practicable, 
of all employees who are not necessary for the telephone system into 
other branches of the Federal service. 

3. When such employees are transferred to the Federal service, the 
creation of a special commission to establish salary ratings and other 
working conditions on a proper basis. 

4. In the meantime provision should be made by Congress for the 
creation of a minimum wage board to fix minimum wage standards 
for women employees who are engaged in the transmission of mes- 
sages in interstate commerce. The board should be authorized to 
differentiate between localities in fixing minima, if on due considera- 
tion such differential rates should be deemed advisable. 

5. The creation of minimum w T age boards in the several States to 
fix minimum wages for all women employees engaged in service 
within the State. 


The investigations and hearings of the commission developed the 
following facts: 

1. The conductors and porters employed in the car service of the 
Pullman Co. are employed under conditions which seem to require 
radical readjustment. Both classes of employees are admitted by 
officials of the company to be underpaid. 

The standard salary of the porters ($27.50 per month) is such that 
the porters are obliged to secure tips from the public in order to live. 
The Pullman Co. is admitted by the chairman of the board of direc- 
tors to be the direct beneficiary of the tips from the public to the 
extent of the difference between a fair wage and that which is now 

The hours of service are extremely long, the regulations of the 
company allowing porters and conductors when in service only four 
hours' sleep per night and penalizing them severely if they sleep 
W 7 hile on duty. Employees of the Pullman Co. are subject to many 
other abuses, among which may be mentioned the arbitrary deduc- 
tion from their salaries for such time as they may not be needed 
for the actual service of the company, although they are required to 
report at the office each morning and are sometimes compelled to 
wait the greater part of the day without compensation ; the require- 
ment that porters shall furnish "blacking, although they are not per- 
mitted to charge passengers for the service of shoe cleaning; the 
system of arbitrary penalties for the infraction of multitudinous 
rules; the requirement that all employees shall purchase their uni- 
forms from one mercantile establishment, the owners of which are 
largely interested in the Pullman Co.; and the lack of proper pro- 
vision of sleeping quarters for employees when away from their home 

2. The Pullman Co. has a bonus system by which employees who 
have a " clean record " for the year receive an extra month's salary. 
This system serves to increase the earnings of those who receive the 
bonus, and is unquestionably appreciated by them. Nevertheless it 
is inequitable in penalizing with extra severity any infractions of 


rules which occur during the latter half of the year, and puts into 
the hands of officials and inspectors a means of discrimination which 
can be arbitrarily exercised. 

3. The effect of the tipping system is not only to degrade those 
who are obliged by their economic conditions to accept tips but to 
promote discrimination in the service of the public. 

4. The employees of the Pullman Co. are unable to improve their 
condition through organization, as employees known to be members 
of labor unions are discharged, and through the means of an effective 
system of espionage employees^ are deterred from affiliating with 
labor unions. 

5. The company is tremendously overcapitalized, having increased 
its capitalization from $36,000,000 in 1893 to $120,000,000 in 1915, 
without the investment of a single dollar on the part of the stock- 
holders. Upon the basis of actual cash paid in, the annual dividends 
of the company are not less than 29 per cent. During the history 
of the company the stockholders have received cash dividends 
amounting to at least $167,000,000 and special stock dividends of 
$64,000,000, making a total of $231,000,000 on an actual investment of 

6. The company enjoys a practical monopoly of the sleeping-car 

It is suggested that the commission recommend : 

1. The enactment by Congress of a statute prohibiting the tipping 
of any employee of a public-service corporation engaged in interstate 
commerce and providing a proper fine for both the giver and the 
recipient of the tip. 

2. The amendment of the existing law regulating the hours of 
service of train employees to include the employees engaged in the 
Pullman service. 

3. The extension of the Newlands Act, as already suggested, to 
cover the Pullman Co. 


The investigations of the commission with regard to railroads 
have been too limited to permit of general findings or recommen- 
dations. Enough evidence has, however, come before the commission 
with regard to three points to warrant attention. 

1. The railroad construction camps are largely insanitary, over- 
crowded, and improperly equipped for the health and comfort of 
the employees. In addition, there are many abuses, such as over- 
charging at the commissary and grafting by foremen. 

2. The so-called voluntary benefit associations of a number of the 
railroads constitute, under the present system of management, a great 
injustice to employees. These funds, which are contributed almost 
entirely by the employees, the management as a rule paying only the 
cost of administration, until recently were generally used to relieve 
the companies from liability for accident, employees being required 
to sign a release in favor of the company at the time that they became 
members of the benefit association. In some cases, even, the member- 
ship is compulsory. Nevertheless, the employees have no voice in 
the management and receive no equity when they are discharged. 
Finally, such associations, under their present management, serve to 


exert an undue influence over employees, since the members, if they 
quit the service for any period or for any cause, sacrifice to the com- 
pany all that has been paid in. 

3. Under the authority granted by the several States the railroads 
maintain a force of police, and some, at least, have established large 
arsenals of arms and ammunition. This armed force, when aug- 
mented by recruits from detective agencies and employment agencies, 
as seems to be the general practice during industrial disputes, consti- 
tutes a private army clothed with a degree of authority which should 
be exercised only by public officials ; these armed bodies, usurping the 
supreme functions of the State and oftentimes encroaching on the 
rights of the citizens, are a distinct menace to public welfare. 

It is suggested that the commission recommend : 

1. Thorough investigation by the Public Health Service of rail- 
road construction camps as well as other labor camps, and the prepa- 
ration of definite plans for such camps and a standard code of sani- 
tary regulations. 

2. The enactment by Congress of a statute expressly prohibiting 
corporations engaged in interstate commerce from inducing or com- 
pelling their employees to sign releases of liability for accidents. 

3. Congress should enact a statute prohibiting interstate employ- 
ers from requiring their employees to contribute to benefit funds, 
and providing for the participation of employees engaged in inter- 
state commerce in the management of all benefit funds and other 
funds to which they contribute. 

4. The regulation by Federal statute of the employment of police 
on interstate railroads. The statute should not only provide for the 
organization, personnel, and powers of such police, but should defi- 
nitely provide that during labor disputes such police should be sub- 
ject to the proper civil authorities and paid out of the public treas- 
ury. The statute should also provide that such corporations should 
be permitted to have firearms only under license, requiring that a 
definite record be maintained showing the character of each firearm 
and to whom it is issued. 

5. The assumption by the States of full responsibility and definite 
provision not only for protecting the property of railroads, but for 
preventing trespass upon their property. 


The investigations and hearings of the commission are the basis 
for the following statements : 

1. The conditions existing in typical industrial communities which 
are either wholly or in large part owned or controlled by a single 
corporation or individual employer, present every aspect of a state 
of feudalism except the recognition of specific duties on the part of 
the emplo3 7 er. The employees in such communities are dependent on 
a single corporation, or employer, for their livelihood. Furthermore, 
the employer in many cases controls the social and political life or 
such communities, either by the complete absorption of local political 
powers or by domination of the local authorities. 

2. The fundamental rights of citizens in such communities are, as 
a general rule, seriously abridged, if not actually denied. Among 


the rights most seriously violated are the right of free speech and 
assemblage and the right of public highways. 

In some cases. as, for example, in Colorado, employers in such com- 
munities have assumed to usurp the functions of the Federal Gov- 
ernment itself in the issuance of money orders, and have not only 
denied emploj^ees access to the post office when located in their com- 
pany stores but have opened and otherwise interfered with the mail 
directed to the employees. 

Such feudalistic conditions tend to develop principally in connec- 
tion with the private exploitation of natural resources, being most 
frequently found in mining camps, lumber camps (including turpen- 
tine camps), and large plantations. There are, however, striking 
examples even in the case of manufactures, as, for examples, the tex- 
tile towns and steel towns. 

3. The most extreme form of domination and control exists in 
what are known as " closed camps," where the employer owns all the 
land upon which such camps are located and, because of this private 
ownership, not only exercises control over the local government but 
dictates arbitrarily who shall be permitted to come into or pass 
through such communities. It has frequently been argued that such 
communities are simply the inevitable accompaniment of the develop- 
ment of new country and will be eliminated with time. This is not 
true, however, as the commission's investigations have disclosed a 
large number of " closed camps " which have been in existence for 
more than a generation. 

It is suggested that the commission recommend : 

1. The enactment of appropriate State legislation providing that 
where communities develop, even upon privately owned land, the 
powers of the civil government shall not be interfered with, nor 
shall the rights of access to the residence of any person be restricted, 
nor shall the rights of persons to come and go unmolested, to speak 
freely and to assemble peacefully, be interfered with or considered 
to stand upon a different basis from the rights of persons in other 

2. In the case of public lands containing timber or minerals, which 
are now or may hereafter come into the possession of the Federal 
Government, it should be provided by statute that neither the lands 
nor the mineral rights should under any circumstances be sold, but 
should be used only upon lease for a limited term, such lease to 
contain as a part of the contract the conditions with regard to the 
rights of inhabitants as recited above and such lease to be f orfeitable 
without recourse in case of the infraction of said conditions. 

3. The Post Office Department should be directed to report to 
Congress all communities in which the post office is in any company's 
store or other building operated by an employer or in which the post- 
master is a private employer or the agent of an employer. The 
report should show the facts separately for those communities in 
which the employer or corporation operates an industry upon which 
any large number of inhabitants are dependent. 

4. Congress and the State legislatures should enact statutes pro- 
viding that any attempt on the part of an employer to influence his 
employees, either directly or indirectly, in connection with any Fed- 
eral election, either for or against any particular candidate, shall 


constitute intimidation; and further specifying that it shall con- 
stitute intimidation for any employer to give notice to his workmen 
that in the event of the election of any particular candidate the 
establishment will not be operated. 


The evidence developed by the hearings and investigations of the 
commission is the basis for the following statements : 

1. The control of manufacturing, mining, and transportation in- 
dustries is to an increasing degree passing into the hands of great 
corporations through stock ownership, and control of credit is cen- 
tralized in a comparatively small number of enormously powerful 
financial institutions. These financial institutions are in turn dom- 
inated by a very small number of powerful financiers. 

2. The final control of American industry rests, therefore, in the 
hands of a small number of wealthy and powerful financiers. 

3. The concentration of ownership and control is greatest in the 
basic industries upon which the welfare of the country must finally 

4. With few exceptions each of the great basic industries is dom- 
inated by a single large corporation, and where this is not true the 
control of the industry through stock ownership in supposedly inde- 
pendent corporations and through credit is almost, if not quite, as 

5. In such corporations, in spite of the large number of stock- 
holders, the control through actual stock ownership rests with a very 
small number of persons. For example, in the United States Steel 
Corporation, which had in 1911 approximately 100,000 shareholders, 
1.5 per cent of the stockholders held 57 per cent of the stock, while 
the final control rested with a single private banking house. 

Similarly, in the American Tobacco Co., before the dissolution, 10 
stockholders owned 60 per cent of the stock. 

6. Almost without exception the employees of the large corpora- 
tions are unorganized, as a result of the active and aggressive 
" nonunion " policy of the corporation managements. 

Furthermore, the labor policy of the large corporations almost in- 
evitably determines the labor policy of the entire industry. 

7. A careful and conservative study shows that the corporations 
controlled by six financial groups and affiliated interests employ 
2,6ol,684 wage earners and have a total capitalization of $19,875,- 
200,000. These six financial groups control 28 per cent of the total 
number of wage earners engaged in the industries covered by the 
report of our investigation. The Morgan-First National Bank group 
alone controls corporations employing 785,499 wage earners. That 
this control is effective is shown by the following telegram from 
J. P. Morgan to E. H. Gary : 

E. H. GARY, New York: 

Have received yo;ir cable of yesterday. My own views are in accordance 
with those of the financial committee in New York. Certainly until question of 
wages has been settled by the coal and railroads, which still in abeyance, but 
settlement seems imminent. Whole question wages should be settled simul- 
taneously by all interests if possible. Going Paris Wednesday. Will see there 


EL C. F v P. A. B. W., * and will cable you result of interview. If possible and 
meets your approval, think better wait until after interview. Perfectly delight- 
ful here. Weather superb. 

J. P. M. 2 

8. The lives of millions of wage earners are therefore subject to the 
dictation of a relatively small number of men. 

9. These industrial dictators for the most part are totally ignorant 
of every aspect of the industries which they control except the fin- 
ances, and are totally unconcerned with regard to the w r orking and 
living conditions of the employees in those industries. Even if they 
were deeply concerned, the position of the employees would be 
merely that of the subjects of benevolent industrial despots. 

10. Except, perhaps, for improvements in safety -and sanitation, 
the labor conditions of these corporation-controlled industries are sub- 
ject to grave criticism and are a menace to the welfare of the Nation. 

11. In order to prevent the organization of employees for the 
improvement of working conditions, elaborate systems of espionage 
are maintained by the large corporations which refuse to deal with 
^abor unions, and employees suspected of union affiliation are dis- 

12. The domination by the men in whose hands the final control of 
a large part of American industry rests is not limited to their em- 
ployees, but is being rapidly extended to control the education and 
u social service " of the Nation. 

13. This control is being extended largely through the creation of 
enormous privately managed funds for indefinite purposes, herein- 
after designated " foundations," by the endowment of colleges and 
universities, by the creation of funds for the pensioning of teachers, 
by contributions to private charities, as well as through controlling 
or influencing the public press. 

14. Two groups of the " foundations," namely, the Rockefeller and 
Carnegie foundations, together have funds amounting to at least 
$250,000,000, yielding an annual revenue of at least $13,500,000, 
which is at least twice as great as the appropriations of the Federal 
Government for similar purposes, namely, education and social 

15. The funds of these foundations are exempt from taxation, yet 
during the lives of the founders are subject to their dictation for any 
purpose other than commercial profit. In the case of the Rockefeller 
group of foundations, the absolute control of the funds and of the 
activities of the institutions now and in perpetuity rests with Mr. 
Rockefeller, his son, and whomsoever they may appoint as their 

16. The control of these funds has been widely published as being 
in the hands of eminent educators and public-spirited citizens. In 
the case of the Rockefeller foundations, however, not only is the con- 
trol in the hands of Mr. John D. Rockefeller, jr., and two of the 
members of the personal staff of Mr. John D. Rockefeller, sr.. who 
constitute the finance committee, but the majority of the trustees of 
the funds are salaried employees of Mr. Rockefeller or the founda- 

i H. C. Frick and P. A. B. Widener. 

-Read at meeting of finance committee, United States Steel Corporation, April 27, 

38819 16 6* 


tions, who are subject to personal dictation and may be removed at 
any moment. 

17. The funds of these foundations are largely invested in se- 
curities of corporations dominant in American industry, whose posi- 
tion has been analyzed under the early headings of this section. The 
policies of these foundations must inevitably be colored, if not con- 
trolled, to conform to the policies of such corporations. 

18. The funds of the foundations represent largely the results 
either of the exploitation of American workers through the payment 
of low wages or of the exploitation of the American public through 
the exaction of high prices. The funds, therefore, by every right be- 
long to the American people. 

19. The powers of these foundations are practically unlimited, ex- 
cept that they may not directly engage in business for profit. In 
the words of President Schurman, of Cornell, himself a trustee of 
the Carnegie foundation. 

Under the terms of this broad charter .there is scarcely anything 
which concerns the life and work of individuals or nations in 
which the Eockefeller foundation would not be authorized to par- 
ticipate. As the safety of the State is the supreme condition of 
national civilization the foundation might in time of war use its 
income or its entire principal for the defense of the Republic. In 
time of peace it might use its funds to effect economic and political 
reforms which the trustees deem essential to the vitality and effi- 
ciency of the Republic. The foundation might become the champion 
of free trade or protection, of trusts, or of the competing concerns 
out of which they grow, of socialism or individualism, of the pro- 
gram of the Republican Party or the program of the Democratic 
Party. It might endow the clergy of all religious denominations, or 
it might subsidize any existing or any new religous denomination. 
To-morrow it might be the champion of the Christian religion, and 
a hundred years hence furnish an endowment for the introduction of 
Buddhism into the United States. It might build tenement houses 
for the poor in New York City, or carry the results of science to 
enrich the exhausted soils of the East or the arid tracts of the West 
It might set up an art gallery in every State of the United States 
or endow universities which would rival the great State universities 
of the West. With the consent of the legislature it might relieve 
any State of the care of its insane, pauper, and dependent classes or 
construct roads for the benefit of farmers and motorists. These may 
not be likely objects for the application of the funds of the Rocke- 
feller foundation. I am hot, however, attempting to forecast its 
work but to understand its charter. 

And, so far as I can see, the proposed charter would authorize all 
these and a multitude of similar activities. If the object of the 
Rockefeller Foundation is to be coextensive with human civilization, 
then it may do anything and everything which its trustees think 
likely to effect reform or improvement in the material, economic, 
intellectual, artistic, religious, moral, and political conditions of the 
American people or of mankind. 

20. The charters of these foundations, with their almost unlimited 
powers, were granted under conditions of such laxity that it has been 
testified by an eminent legal authority who made an extensive investi- 
gation that those granted by New York State are legally defective 


and unconstitutional. Furthermore, evidence developed by the hear- 
ings of the commission showed that in increasing the number of its 
trustees without complying with the requirements of the law govern- 
ing corporations the Rockefeller Foundation has already been guilty 
of a breach of the law. 

21. These foundations are subject to no public control, and their 
powers can be curbed only by the difficult process of amending or 
revoking their charters. Past experience, as, for example, in the 
case of the insurance companies, indicates that the public can be 
aroused only when the abuses have become so great as to constitute a 

22. The entrance of the foundations into the field of industrial 
relations, through the creation of a special division by the Rocke- 
feller Foundation, constitutes a menace to the national welfare to 
which the attention not only of Congress but of the entire country 
should be directed. Backed by the $100,000,000 of the Rockefeller 
Foundation, this movement has the power to influence the entire 
country in the determination of its most vital policy. 

23. The documentary evidence in the possession of the commission 
indicates : 

(a) That the so-called " investigation of industrial relations " has 
not, as is claimed, either a scientific or a social basis, but originated 
to promote the industrial interests of Mr. Rockefeller. The original 
letter inviting Mr. W. L. Mackenzie King to associate himself with 
the Rockefellers stated that Mr. Rockefeller and Mr. Greene in " their 
purely corporate capacity as owners and directors of large in- 
dustries " desired his aid. 

(b) That the investigation forms part of what Mr. Rockefeller, 
in a letter to Mr. Ivy L. Lee (the press agent of the Colorado opera- 
tors) , called the " union educational campaign," which is referred to 
by Mr. Bowers as " the fight for the open shop," the results of which 
are clearly manifested in the conditions existing in the camps of the 
Colorado Fuel & Iron Co., conducted on the " open-shop " principle. 

(<?) That Mr. Rockefeller planned to utilize in this campaign 
literature containing statements which were known to him at the time 
to be untrue and misleading (as, for example, the numerous misstate- 
ments in the " Sermon to young men " of Dr. Newall Dwight Hillis, 
including the statement that the Colorado operators offered to recog- 
nize the miners' union), and also literature containing statements 
which constituted a malicious libel upon a large body of American 
citizens for example, the following statement of f*rof. John J. 
Stevenson : 

Labor unions defy the law, but are ever ready to demand its protection; 
their principles are no better than those of the India thugs, who practiced 
robbery and murder in the name of the goddess Cali. 

(d) That the investigation of industrial relations is not being made 
in good faith, inasmuch as its director states that he will not now nor 
hereafter make public his findings regarding a most important part 
of his investigation, namely, the investigation in Colorado. 

24. The purpose of Mr. Rockefeller to influence the public press 
is clearly shown by the employment of an experienced publicity 
expert as a member of his personal staff, and is indicated by his 
evident interest in the ownership or control of a number of publica- 
tions, of which we have records dating from the inquiry of his 


secretary regarding the Pueblo Star Journal in May, 1913, to the 
extensive conferences regarding a loan of $125,000 to finance the 
Nation's Business, the organ of the National Chamber of Commerce, 
which was established and given a semiofficial status through the 
instrumentalities of the Secretary of Commerce and Labor, with the 
sanction of a former President of the United States. 

25. The extent of the possible influence of these foundations and 
private endowments of institutions for education and public service 
is shown by a large amount of evidence in the possession of the com- 
mission. The following examples may be cited : 

(a) The adoption of a definite line of policy by the Bureau of 
Municipal -Research of New York to meet the conditions imposed by 
Mr. Rockefeller in connection with proposed contributions. 

(5) The abandonment by several colleges and universities of sec- 
tarian affiliations and charter clauses relating to religion in order to 
secure endowments from the Carnegie Corporation and pensions for 
professors from the Carnegie Foundation for the Advancement of 
Teaching. It would seem conclusive that if an institution will will- 
ingly abandon its religious affiliations through the influence of these 
foundations, it will even more easily conform to their will any other 
part of its organization or teaching. 

26. Apart from these foundations there is developing a degree of 
control over the teachings of professors in our colleges and univer- 
sities which constitutes a most serious menace. In June of this year 
two professors, know throughout their professions as men of great 
talent and high character, were dropped from the positions they 
had occupied and no valid reason for such action was made public. 
Both were witnesses before the commission, and made statements 
based upon their own expert knowledge and experience which were 
given wide publicity. One was a professor of law in a State univer- 
sity, who had acted as counsel for the strikers in Colorado; the other 
a professor of economics, who had not only been active in fights in 
behalf of child-labor legislation and other progressive measures, but 
had recently published a work comparing the income paid for prop- 
erty ownership with the income paid for all classes of service. 

In the case of the State university we know that the coal operators 
in conjunction with other business interests had gained the ascend- 
ancy and exercised a great degree of control over the former governor 
of the State, that the coal operators were bitterly opposed to the 
professor in question, and that the dismissal of the professor had been 
publicly urged by the operators upon numerous occasions, and we 
nave the uncontroverted statement of the professor that he had been 
warned that if he testified before the commission he would not be 
reappointed. In the case of the professor in the other university 
(which, though privately endowed, receives large appropriations 
from the State) we know that its trustees are interested in corpora- 
tions which have bitterly opposed progressive legislation, and are 
men whose incomes are derived from property ownership and not 
from service. 

In the face of such an enormous problem one can only frankly 
confess inability to suggest measures which will protect the Nation 
from the grave dangers described. It is believed, however, that if 
Congress will enact the measures already recommended, providing 
for a heavy tax on large inheritances with a rigid limitation on the 


total amount of the bequest, for the reclamation by the Federal 
Government of all parts of the public domain (including mineral 
rights) which have been secured by fraud, and for a tax on non- 
productive land and natural resources, a great step in the right 
direction will have been taken. 

As regards the " foundations " created for unlimited general pur- 
poses and endowed with enormous resources, their ultimate possi- 
bilities are so grave a menace, not only as regards their own activities 
and influence but also the benumbing effect 1 which they have on 
private citizens and public bodies, that if they could be clearly dif- 
ferentiated from other forms of voluntary altrustic effort it would 
be desirable to recommend their abolition. It is not possible, how- 
ever, at this time to devise any clear-cut definition upon which they 
can be differentiated. 

As the basis for effective action, it is suggested that the commission 
recommend : 

1. The enactment by Congress of a statute providing that all 
incorporated nonprofit-making bodies whose present charters em- 
power them to perform more than a single specific function and 
whose funds exceed $1,000,000 shall be required to secure a Federal 

The Federal charter should contain the following provisions : 

(a) Definite limitation of the funds to be held by any organiza- 
tion, at least not to exceed the largest amount held by any at the 
time of the passage of the act. 

(b) Definite and exact specifications of the powers and functions 
which the organization is empowered to exercise, with provision for 
heavy penalties if its corporate powers are exceeded. 

(c) Specific provision against the accumulation of funds by the 
compounding of unexpended income and against the expenditure in 
any one year of more than 10 per cent of the principal. 

(d) Rigid inspection of the finances as regards both investment 
and expenditure of funds. 

(e) Complete publicity through open reports to the proper Gov- 
ernment officials, 

(/) Provision that no line of work which is not specifically and 
directly mentioned in the articles of incorporation shall be entered 
upon without the unanimous consent and approval of the board of 
trustees, nor unless Congress is directly informed of such intention 
through communication to the Clerk of the House and the Clerk of 
the Senate, which shall be duly published in the Congressional 
Record, nor until six months after such intention has been declared, 

2. Provision by Congress for the thorough investigation, by a 
special committee or commission, of all endowed institutions, both 
secular and religious, whose property holdings or income exceeds a 
moderate amount. The committee or commission should be given 
full power to compel the production of books and papers and the 
attendance and testimony of witnesses. It should be authorized and 
directed to investigate not only the finances of such institutions but 
all their activities and affiliations. 

1 A striking illustration of the benumbing effect of such foundations was revealed by 
the almost complete cessation of private activity for the relief of the Belgians as soon 
as the Rockefeller Foundation issued to the press a statement of its intention to under- 
take such relief. 


3. As the only effective means of counteracting the influence of the 
foundations, as long as they are permitted to exist, consists in the 
activities of governmental agencies along similar lines, the appro- 
priations of the Federal Government for education and social service 
should be correspondingly increased. 


It was obviously impossible for the commission to attempt a de- 
tailed investigation of agricultural condition, but because of the 
very immediate bearing of the land question on industrial unrest, it 
was felt necessary to make as thorough investigation as possible of 
the phases which seemed to have the most direct bearing on our gen- 
eral problem. The phases selected for discussion were, first, the con- 
centration of land ownership as shown by existing statistics ; second, 
the problem of seasonal and casual agricultural labor; third, the in- 
crease and change in the character of farm tenancy ; and, fourth, the 
introduction of industrial methods into agriculture through the de- 
velopment of corporations operating large tracts of land. The find- 
ings and recommendations with reference to the concentration of 
ownership and the problems of seasonal labor are set forth elsewhere. 
At this point it is desired to present the results of the investigations 
of tenancy and agricultural corporations. 

The investigation of these problems was confined practically to the 
Southwest, because it is in this region that the systems have become 
most fully developed and their results in the form of the acute unrest 
of a militant tenant movement are most easily studied. The investi- 
gations in this region, however, were very thorough, consisting of de- 
tailed studies and reports by field investigators, which were later 
confirmed by a public hearing. 

As a result of these investigations the following conclusions are 
fully justified: 

1. Tenancy in the Southwestern States is already the prevailing 
method of cultivation and is increasing at a very rapid rate. In 1880 
Texas had 65,468 tenant families, comprising 37.6 per cent of all 
farms in the State. In 1910 tenant farmers had increased to 219.571 
and operated 53 per cent of all farms in the State. Reckoning on 
the same ratio of increase that was maintained between 1900 and 
1910, there should be in Texas in the present year (1915) at least 
236,000 tenant farmers. A more intensive study of the field, however, 
shows that in the 82 counties of the State where tenancy is highest 
the average percentage of tenants will approximate 60. 

For Oklahoma we have not adequate census figures so far back, 
but at the present time the percentage of farm tenancy in the State 
is 54.8, and for the 47 counties where the tenancy is highest the per- 
centage of tenancy is 68.13. 

2. Tenancy, while inferior in every way to farm ownership from 
a social standpoint, is not necessarily an evil if conducted under a 
system which protects the tenants and assures cultivation of the soil 
under proper and economical methods, but where tenancy exists 
under such conditions as are prevalent in the Southwest, its increase 
can be regarded only as a menace to the Nation. 

3. The prevailing system of tenancy in the Southwest is share 
tenancy, under which the tenant furnishes his own seed, tools, and 


teams and pays the landlord one-third of the grain and one-fourth 
of the cotton. There is, however, a constant tendency to increase the 
landlord's share through the payment either of cash bonuses or of a 
higher percentage of the product. Under this system tenants as a 
class earn only a bare living through the work of themselves and their 
entire families. Few of the tenants ever succeed in laying by a sur- 
plus. On the contrary, their experiences are so discouraging that 
they seldom remain on the same farm for more than a year, and 
they move from one farm to the next, in the constant hope of being 
able to better their condition. Without the labor of the entire family 
the tenant farmer is helpless. As a result, not only is his wife prema- 
turely broken down, but the children remain uneducated and without 
the hope of any condition better than that of their parents. The 
tenants having no interest in the results beyond the crops of a single 
year, the soil is being rapidly exhausted and the conditions, there- 
fore, tend to become steadily worse. Even at present a very large 
proportion of the tenants' families are insufficiently clothed, badly 
housed, and underfed. Practically all of the white tenants are native 
born. As a result of these conditions, however, they are deteriorating 
rapidly, each generation being less efficient and more hopeless than 
the one proceeding. 

4. A very large proportion of the tenants are hopelessly in debt 
and are charged exorbitant rates of interest. Over 95 per cent of 
the tenants borrow from some source, and about 75 per cent borrow 
regularly year after year. The average interest rate on all farm 
loans is 10 per cent, while small tenants in Texas pay 15 per cent or 
more. In Oklahoma the conditions are even worse, in spite of the 
enactment of laws against usury. Furthermore, over 80 per cent of 
the tenants are regularly in debt to the stores from which they secure 
their supplies, and pay exorbitantly for this credit. The average 
rate of interest on store credit is conservatively put at 20 per cent 
and in many cases ranges as high as 60 per cent. 

5. The leases are largely in the form of oral contracts which run 
for only one year and which make no provision for compensation 
to the tenant for any improvements which may be made upon the 
property. As a result, tenants are restrained from making improve- 
ments, and in many cases do not properly provide for the upkeep of 
the property. 

6. Furthermore, the tenants are in some instances the victims of 
oppression on the part of landlords. This oppression takes the form 
of dictation of character and amount of crops, eviction without due 
notice, and discrimination because of personal and political convic- 
tions. The existing law provides no recourse against such abuses. 

7. As a result both of the evils inherent in the tenant system and 
of the occasional oppression by landlords, a state of acute unrest is 
developing among the tenants and there are, clear indications of the 
beginning of organized resistance which may result in civil dis- 
turbances of a serious character. 

8. The situation is being accentuated by the increasing tendency 
of the landlords to move to the towns and cities, relieving themselves 
not only from all productive labor, but from direct responsibility for 
the conditions which develop. Furthermore, as a result of the in- 
creasing expenses incident to urban life there is a marked tendency 


to demand from the tenant a greater share of the products of his 

9. The responsibility for the existing conditions rests not upon the 
landlords, but upon the system itself. The principal causes are to 
be found in the system of short leases, the system of private credit 
at exorbitant rates, the lack of a proper system of marketing, the ab- 
sence of educational facilities, and last but not least the prevalence 
of land speculation. 

10. A new factor is being introduced into the agricultural situa- 
tion through the development of huge estates owned by corporations 
and operated by salaried managers upon a purely industrial system. 
The labor conditions on such estates are subject to grave criticism. 
The wages are extremely low, 80 cents per day being the prevailing 
rate on one large estate which was thoroughly investigated ; arbitrary 
deductions from wages are made for various purposes; and a con- 
siderable part of the wages themselves are paid in the form of 
coupons, which are in all essential particulars the same as the " scrip " 
which has been the source of such great abuse. Furthermore, the 
communities existing on these large estates are subject to the com- 
plete control of the land-owning corporation, which may regulate 
the lives of citizens to almost any extent. There is an apparent tend- 
ency toward the increase of these large estates, and the greatest 
abuses may be expected if they are allowed to develop unchecked. 

11. Prompt and effective action on the part of the States and 
Nation is necessary if any alleviation of the conditions which have 
been described is to be achieved. 

It is suggested that the commission recommend : 

1. The development through legislation of longer time farm 
leases that will make for fair rents, security of tenure, and protection 
of the interests of the tenant in the matter of such improvements as 
he may make on a leasehold in his possession. Such legislation 
should look forward to leasing systems that will increase tillage, 
improve the yielding powers of the soil and maintain a greater popu- 

In order to secure this desired end it is suggested that the commis- 
sion further recommend the creation of : 

2. National and State land commissions with powers 

(a) To act as land courts with powers to hear evidence given by 
landlord and tenants as to questions that have to do with fair rents, 
fixity of tenure and improvements made by tenants on landlords' 
property ; to gather evidence, independently of both parties, that will 
the better enable such land courts to arrive at the true facts in each 
case ; and to render judgment that will be mandatory for such time 
as the contractual relationship may be determined to hold. 

(b) To operate farm bureaus for the following purposes: 

First. To act as an agent between landlords and tenants in the 
distribution of tenant labor. 

Second. To act as an agent between landlords and tenants in the 
preparation of equitable contracts. 

Third. To act as an information agency to assist home-seeking 

Fourth. To assist in the distribution of seasonal labor. 


3. The development of better credit facilities through the assist- 
ance of the Government and cooperative organization of farmers 
and tenants. No single measure can be recommended; the results 
must be achieved through the development of a sound rural-credit 
system, the development of land banks, mortgage associations and 
credit unions. Foreign experience shows that through these means 
the rate of interest can be greatly reduced and the security of both 
the borrower and the lender can be increased. 

4. The general introduction of modernized rural schools and com- 
pulsory education of children. The functions of the school system 
shoulol extend beyond education to the social service of the entire 
rural community, assisting in the organization of farmers and ten- 
ants for cooperative purposes, and promoting other measures looking 
to the community's welfare. 

5. The revision of the taxation system so as to exempt from taxa- 
tion all improvements and tax unused land at its full rental value. 


The investigations of the commission are the basis for the follow- 
ing statements: 

1. Among workers of every class there are constantly arising va- 
rious questions for judicial settlement w y hich under present condi- 
tions can not be speedily or satisfactorily adjusted. 

2. These claims are of a very diverse character and include not 
only cases of actual injustice through the retention of wages, but 
questions of interpretation of contract and the establishment of 
justice in cases in which contracts are lacking. 

3. The ordinary courts are unfitted to decide such questions, not 
only because of the method of procedure but because of the unf amili- 
arity of ordinary magistrates and judges with the conditions in- 
volved in such claims. 

It is suggested that the commission recommend : 

1. The establishment either by the States or by municipalities of 
industrial courts similar to those which have proved to be successful 
in European countries. The organization and method of procedure 
of such courts are described in detail in Bulletin No. 98 of the 
United States Bureau of Labor and need not be discussed here. 

2. The Commissioners of Labor or the industrial commissions of 
the several States should be authorized and directed, where such 
powers do not now exist, to receive the legal complaints of all classes 
of workmen, and, where they are found to have a proper basis, to 
prosecute such claims vigorously, with a view to securing either a 
voluntary settlement or the award of adequate recompense by the 
proper tribunal. The commissioners of labor or the industrial com- 
missions should be given adequate legal assistance to enable them to 
prosecute such claims promptly and vigorously. Proper steps should 
be taken to provide for cooperation with the Federal Immigration 
Bureau, if the recommendation on page 51 is adopted. 

3. The States and municipalities should consider the desirability 
of creating an office similar to that of the public defender in Los 
Angeles tot act in civil claims of small size. 




The commission has conducted through its agents extensive investi- 
gations and has held hearings at which the persons who have devoted 
great study to the question of trade-union law testified at length. 
The investigations were directed both to establishing the present 
status of the law governing trade-unions and industrial disputes and 
to ascertaining the practical effects of certain classes of laws and 
court decisions. The results of the investigations are largely em- 
bodied in the reports of Mr. J. Wallace Bryan, of the Maryland bar, 
and Mr. Edwin E. Witte. 

Because of the necessity for exactness in dealing with questions 
which are so involved and which have to so large an extent been 
clouded by contradictory court decisions, it is impossible to present a 
satisfactory summary of the conclusions which have been reached 
upon this subject. It may, however, be said that in substance the 
situation revealed by these investigations is as follows : 

1. The greatest uncertainty exists regarding the legal status of 
almost every act which may be done in connection with an industrial 
dispute. In fact, it may be said that it depends almost entirely upon 
the personal opinion and social ideas of the court in whose jurisdic- 
tion the acts may occur. 

2. The general effect of the decisions of American courts, however, 
has been to restrict the activities of labor organizations and deprive 
them of their most effective weapons, namely, the boycott and the 
power of picketing, while, on the other hand, the weapons of em- 
ployers, namely, the power of arbitrary discharge, of blacklisting, and 
of bringing in strike breakers, have been maintained, and legislative 
attempts to restrict the employers' powers have generally been de- 
clared unconstitutional by the courts. Furthermore, an additional 
weapon has been placed in the hands of the employers by many 
courts in the form of sweeping injunctions, which render punishable 
acts which would otherwise be legal, and also- result in effect in de- 
priving the workers of the right to jury trial. 

3. Important steps have been taken to deal with this situation by 
the enactment of the Clayton Act, applying to the Federal jurisdic- 
tion, and by the passage of laws in Massachusetts and New York 
which define the rights of parties engaged in industrial disputes. 
The actual effect of the Clayton Act can not be ascertained until it 
has been tested in the courts, but eminent legal authorities have 
expressed grave doubts that it will accomplish the desired results. 
At any rate, it does not seem to remove the root of the existing 
injustice, and, furthermore, in all the States except New York and 
Massachusetts the grave and uncertain situation already described 
exists. This situation must be corrected. 

4. There are, apparently, only two lines of action possible: First, 
to restrict the rights and powers of the employers to correspond in 
substance to the powers and rights now allowed to trade.-unions, and 
second, to remove all restrictions which now prevent the freedom of 
action of both parties to industrial disputes, retaining only the ordi- 
nary civil and criminal restraints for the preservation of life, prop- 
erty, and the public peace. The first method has been tried re- 
peatedly and has failed absolutely, not only because of the interven- 



tion of the courts but because the very nature of the acts complained 
of on the part of employers (blacklisting and arbitrary discharge) 
makes it impossible to prevent them effectively by any form of legis- 
lation or administration. The only method, therefore, seems to be 
the removal of all restrictions upon both parties, thus legalizing the 
strike, the lockout, the boycott, the blacklist, the bringing in of 
strike breakers, and peaceful picketing. This has been most suc- 
cessfully accomplished by the British trades disputes act, which is 
the result of 50 years of legal evolution, and in its present form 
seems to work as successfully as could possibly be expected. 

It is suggested, therefore, that the commission "recommend : 

1. The enactment by Congress and the States of legislation em- 
bodying the principles contained in the British trades disputes act, 
the text of which is as follows r 

An agreement or combination of two or more persons to do or pro- 
cure to be done any act in contemplation or furtherance of a trade 
dispute between employers and workmen shall not be indictable as a 
conspiracy if such an act committed by one person w r ould not be 
punishable as a crime. An act done in pursuance of an agreement 
or combination by two or more persons shall, if done in contempla- 
tion or furtherance of a trade dispute, not be actionable unless the 
act, if done without any such agreement or combination, would be 

An action against a trade-union, whether of workmen or masters, 
or against any members or officials thereof on behalf of themselves 
and all other members of the trade-union in respect of any tortious 
act alleged to have been committed by or on behalf of the trade- 
union, shall not be entertained by any court. 

An act done by a person in contemplation or furtherance of a 
trade dispute shall not be actionable on the ground only that it 
induces some other person to break a contract of employment or 
that it is an interference with the trade, business, or employment of 
some other person, or with the right of some other person to dispose 
of his capital or his labor as he wills. 

It shall be lawful for one or more persons, acting either on their 
own behalf or on behalf of a trade-union, or of an individual em- 
ployer or firm in contemplation or furtherance of a trade dispute to 
attend at or near a house or place where a person resides or works 
or carries on business or happens to be, if they so attend merely for 
the purpose of peacefully obtaining or communicating information, 
or of peacefully persuading any person to work or abstain from 

Every person who, with a view to compel any other person to 
abstain from doing or to dp any act which such other person has a 
legal right to do or abstain from doing, wrongfully and without 
"egal authority 

1. Uses violence to or intimidates such other person or his wife or 
children, or injures his property; or 

2. Persistently follows such other person about from place to 
place; or 

3. Hides any tools, clothes, or other property owned or used by 
the other person, or deprives him of or hinders him in the use there- 
of ; or 


4. Watches or besets the house or other place where such other 
person resides or works or carries on business or happens to be, 
or the approach to such a house or place : or 

5. Follows such other person with tw j o or more other persons in a 
disorderly manner in or through any street or road, shall on con- 
viction thereof by a court of summary jurisdiction, or an indictment 
as hereinafter mentioned, be liable either to pay a penalty not ex- 
ceeding 20, or to be imprisoned for a term not exceeding three 
months, with or without hard labor. 


The commission has made extensive investigations and has heard 
many witnesses upon this subject, and as a result the following con- 
clusions are justified: 

1. The problem of policing industry is generally conceived to lie 
in the suppression of violence and the protection of life and prop- 
erty; but in reality consists in the more fundamental problem of 
protecting the rights of employers and employees as well as pre- 
serving the peace. 


2. Violence is seldom, if ever, spontaneous, but arises from a con- 
viction that fundamental rights are denied and that peaceful methods 
of adjustment can not be used. The sole exception seems to lie in the 
situation where, intoxicated with power, the stronger party to the 
dispute relies 'upon force to suppress the w r eaker. 

3. The arbitrary suppression of violence by force produces only 
resentment, which will rekindle into greater violence when oppor- 
tunity offers. Violence can be prevented only by removing the causes 
of violence; industrial peace can rest only upon industrial justice. 

4. The origin of violence in connection with industrial disputes 
can usually be traced to the conditions prevailing in the particular 
industry in times of peace or to arbitrary action on the part of 
governmental officials w^hich infringes on what are conceived to be 
fundamental rights. Violence and disorder during actual outbreaks 
usually result from oppressive conditions that have obtained in a 
particular shop or factory or in a particular industry. Throughout 
history where a people or a group have been arbitrarily denied rights 
which they conceived to be theirs, reaction has been inevitable. Vio- 
lence is a natural form of protest against injustice. 

5. Violence in industrial disputes is not immediately the product 
of industrial conditions, but of the attitude of the parties to the dis- 
pute after grievances or demands have been presented. The prin- 
cipal sources of an attitude leading to violence are : 

(a) Arrogance on the part of the stronger party. This may 
result immediately in violence through the use of force for the sup- 
pression of the weaker party. The force used may be physical or 
industrial. Physical force may be and is used by both employers 
and employees, through intimidation, assaults, or attacks on prop- 
erty. Such physical aggression is seldom used by employees, as they 
are strategically the weaker party and the results are negative ; only 


under exceptional circumstances can an employer be coerced by the 
use of force or intimidation. The exceptions seem to lie in the use 
of secret means, such as dynamite, with the object of weakening the 
employer's resistance. 

The use of force by workers is normally directed not against the 
person or property of the employer, but against strike breakers and 
guards. Many instances of the use of physical force by the agents 
of employers have, however, come before the commission, indicating 
a relatively wide use, particularly in isolated communities." Such 
acts of violence usually take the form of assaults upon the leaders 
of the workers or upon organizers. 

The instruments of industrial force belong chiefly to the employer, 
because of his control of the job of the worker. Their use is more 
common and more effective than any other form of violence at the 
command of the employer. The most powerful weapon is the power 
of discharge, which may be used indiscriminately upon mere sus- 
picion, which under certain conditions may be almost as potent, 
either in use or threat, as the power of life and death. It is the 
avowed policy of many employers to discharge any man who gives 
any sign of dissatisfaction on the theory that he may become a 
trouble maker or agitator. 

The only corresponding weapon in the hands of the workers is 
sabotage, in the form either of malicious destruction of property or 
of interference with production. The field of its use is much more 
restricted in practice than in theory, and its results at best are nega- 
tive and produce in the employer only a blind resentment and un- 
discriminating hate. Sabotage as a policy shows no signs of devel- 
oping in American industry. 

(&) Equally productive of an attitude leading to violence is the 
denial of the use of peaceful methods of adjusting grievances, or the 
creation of a situation in which their use becomes impossible. 

On the part of the employer the arbitrary acts which may be 
classed under this general head are : Denial of the right to organize ; 
refusal to consider the complaints of workers; refusal to meet the 
authorized representatives of workers. 

Under modern industrial conditions any one of these acts makes 
peaceful negotiation and settlement impossible. Without organiza- 
tion of the workers their collective claims can not be considered; 
without the right to appoint such representatives as they choose, 
workers are at the mercy of the employer's power of discharge, and 
are usually unequal to the task of presenting and arguing their 
claims ; while the refusal to consider grievances leaves only the alter- 
native of the strike. 

On the part of the workers, the possibility of peaceful settlement 
may be destroyed by refusal to discuss claims, by internal dissensions 
which render collective and definite action looking to a settlement im- 
possible, and by the issuance of ultimata which allow no time for con- 
sideration and negotiaton. In any one of these situations the em- 
ployer has only the choice between tame submission or absolute re- 
sistance to the demands of the workers. 

(c) The immediate cause of violence in connection with industrial 
disputes is almost without exception the attempt to introduce strike 
breakers to take the place of the workers who have struck or who are 


locked out. The entire problem of policing industrial disputes grows 
out of the problem of the strike breaker and the attitude of the 
State toward him. 

All experience shows that if no attempt is made to operate the 
plant, violence and disturbances requiring the police are practically 
unknown, whereas the attempt of strike breakers to reach the plant, 
particularly where strikers are enjoined or prevented from using 
reasonable means to inform them of the existence of the strike and 
to use persuasive methods to keep them from entering the plant, is 
invariably accompanied by disorder and sometimes by active violence. 

The existing attitude of the courts and of governmental officials 
generally is that the entire machinery of the State should be put be- 
hind the strike breaker. This attitude is based upon the theory that 
two important rights are involved first, "the right of the strike 
breaker to work," and, second, " the right of the employer to do 
business.'' During earlier years, the right of the strike breaker was 
stressed by the courts, but since the decision of Vice Chancellor 
Stevenson in 1902 (Jersey City Ptg. Co. v. Cassidy, 53 Atl., 230), in 
which the doctrine was announced as " recently recognized," the 
right of the employer to do business has been in favor apparently 
because of its wider application and the fact that being denominated 
a property right, injunctions could regularly be issued for its protec- 
tion. Regardless, however, of their origin, both of these so-called 
rights seem to have been based upon misconceptions by the courts. 
The " right to work " guaranteed to the strike breaker seems to be 
based upon the conception that the strike breaker is normally a work- 
ingman, who seeks work and desires to take the place of the striker. 
The fact is, practically without exception, either that the strike 
breaker is not a genuine workingman but is a professional who merely 
fills the place of the worker and is unable or unwilling to do steady 
work, or, if he is a bona fide workingman, that he is ignorant of con- 
ditions or compelled to work under duress. The nonworking char- 
acter of the strike breaker is shown by the fact that very few are 
ever retained as workers after the termination of a strike, while the 
attitude of genuine workingmen toward strike breaking is shown by 
the significant fact that in the bids of employment agencies and 
detective agencies to furnish strike breakers it is provided that 
guards will be furnished with each car " to prevent escape in transit," 
and by the fact that when men are candidly informed in the public 
employment offices of the existence of a strike, workers practically 
never apply for such positions, even though they may be in dire 

The second misconception is contained in the idea that the " right 
to do business " is an absolute right. Besides the fact that it has only 
been insisted upon by the courts within the past 20 years and has no 
express legislative or constitutional sanction whatever, this right is 
subject to the most severe limitation and infringement even without 
due process of law. Not only can the legislature limit the right to 
do business in almost every conceivable way, but health authorities 
are given power to suspend it entirely if the public safety demands, 
as in the case of either a human or an animal epidemic. Further- 
more, the courts can not and will not guarantee in any way the " good 
will" which is supposed to be the property aspect of the right to 


do business, nor will they assess damages on account of any alleged 
injury based upon the " probable expectancy " of the business. 

The right to do business is in fact permitted only so far as its ex- 
ercise is in the public interest, and it may be restricted or prohibited 
through the police power whenever it is dangerous or in any way 
deleterious to the public. This is the reason underlying not only 
quarantine but every form of regulation and prohibition. 

The plea of the workers for the assumption of a new attitude in 
relation to strike breakers is, however, based not only upon the nega- 
tive character of the rights of the employer and the strike breaker, 
but upon a positive though somewhat undefinable demand for recog- 
nition that strikers have a right to the jobs which they have left until 
their grievances are in some way adjusted. The argument is not 
only that when workers are willing to strike and sacrifice their liveli- 
hood, the conditions against which they protest must be assumed 
to be socially injurious, but, even more, that the worker who has 
struck in support of his demand for better conditions has not aban- 
doned his job, but, in fact, has a keener interest in it than when 
quietly submitting to distasteful conditions. 

At the very basis of the workers' contentions, however, lies the 
realization that working conditions can be improved only by strikes 
and that no strike can be won if the employer can operate his plant 
without difficulty. This is becoming increasingly true with every 
step in the Nation's industrial development. During more primi- 
tive periods, if workers struck their places could not be filled except 
through the existence of a surplus of qualified labor in the commu- 
nity or by enticing workers from other employers. Now, the devel- 
opment of transportation, the establishment of specialized agencies 
for supplying strikebreakers, and the growth of large corporations, 
which can shift employees from one plant to another, have given 
each employer a command of the labor market of the entire country. 
There are agencies in every large city which will contract to supply 
any kind of labor on short notice, while almost any of the large in- 
dustrial corporations can either supply the normal demand with one- 
half or three-quarters of their plants, or recruit from the surplus 
labor around their various plants a skeleton organization which can 
resume operations in a short time. 

The respective rights of employer, striker, and strikebreaker are 
matters which can not be solved by any method of cold reasoning, 
and should not be solved except by the force of public opinion acting 
either directly or through the medium of their representatives. In 
such matters we feel that our action can extend no further than the 
analysis of the issues, the presentation of the pertinent facts, and the 
expression of such general opinions as we may have reached. 

We are convinced, however, that a modification of the legislative 
and judicial attitude on this question is necessary, and also that in 
the minds of the public a more general appreciation of the conten- 
tions of the workers is already taking place. 

A general exception to this may perhaps exist in the case of public 
utilities, including not only the services which are commonly in- 
cluded, but the supply of milk, ice, and other similar necessities. 
The absolute dependence of the population of modern cities upon 
the noninterruption of such services has created a widespread public 


demand for action which will insure them under all conditions. The 
public may good-humoredly walk during a street-car strike, but the 
interruption of the supply of food, fuel, and ice produces an atti- 
tude of public desperation. We confess that, under present condi- 
tions, no absolute insurance against its interruption by industrial 
disputes seems practicable. As long, certainly, as these services 
are performed by private corporations, the right of employees to 
strike should not and can not constitutionally be abrogated or 
abridged. Even under Government ownership and operation the 
problem is only slightly altered by the removal of the incentive of 
private profit for the maintenance of improper labor conditions, 
while cooperative operation is too vague even for analysis. At pres- 
ent proper action seems to consist in providing, first, for the most 
effective possible means for conciliation, investigation, and arbitra- 
tion ; second, for the use of ail the leverage of public opinion to pro- 
mote reasonableness on the part of those involved in the dispute; 
and, finally, for the plan as outlined elsewhere for defining clearly 
the rights of the parties to the dispute and the impartial but firm 
enforcement of such rights. 

(d) The greatest disorders and most acute outbreaks of violence 
in connection with industrial disputes arise from the violation of 
what are considered to be fundamental rights, and from the perver- 
sion or subversion of governmental institutions. 

This -source of acute unrest has been discussed at length in. a pre- 
ceding section, so that at this point it is necessary only to summarize 
briefly its commonest manifestations, and to state that even the lim- 
ited investigations which the commission has been able to make show 
that practically every industrial State has at some relatively recent 
time permitted its institutions to be used by one party or the other 
to an industrial dispute (almost without exception the employers) in 
such a way that the rights of the other party were either nullified or 
seriously transgressed. 

It may be said that every governmental institution and function 
has been at some time utilized by the stronger industrial factor for 
the oppression and suppression of the weaker, but those which are 
most commonly utilized are, first, the police, including not only the 
municipal police, the sheriffs and deputies, the State police and con- 
stabulary, and the militia, but the private guards, detectives, and 
vigilante organizations, which usurp and exercise the functions of the 
police. The biased action of the State and municipal police seldom 
extends beyond the making of unwarranted arrests, the enforcement 
of unreasonable rules regarding such matters as picketing and public 
assemblage, and the use of excessive brutality. The State and 
municipal police are uniformly paid by the public and such control 
over their action as exists is generally indirect. In the case of the 
other bodies mentioned the control is frequently direct and their 
action frankly and bitterly partisan. The sheriffs in many counties 
deputize guards in the employment and pay of corporations, without 
any qualifications and sometimes even without knowing their names. 
Similarly the militia are at times recruited from the guards and other 
employees of corporations. The private guards, detectives, and vigi- 
lantes are openly partisan and can have no other purpose in con- 
nection with a strike than to break it with such means as they can 


The police would, however, be much less effective if their control 
in a given locality did not usually imply also control of all or part 
of the local courts to give a legal sanction to lawlessness, to protect 
these who are criminally liable, and to exercise their full rigor in 
the prosecution of the strikers. Such controlled courts have not only 
found it possible through the use of blanket injunctions to make 
illegal acts which would otherwise be legal, but, resting upon their 
protection, the police, the deputies, the militia, and the private 
guards have in many cases felt free to go to unbelievable lengths in 
order to carry out their plans. 

The subserviency of the courts in many parts of the country can 
not be more clearly shown than by the fact that they have time and 
again permitted the militia, under color of so-called martial law, 
to usurp their functions and to defy their associations who resisted 
the encroachment. The situation is accentuated also by the fact that 
the decisions of such corrupt and subservient courts become the basis 
upon which later honest "record worshipping" judges form their 
own opinions. 1 

When governmental institutions are thus corrupted and used as in- 
struments of oppression men can only resist with such power as they 
have, not alone for the protection of themselves and their families 
but for the preservation of the fundamental rights of themselves 
and their fellow citizens. Resistance to the usurpers of governmental 
power and to those who pervert to base uses the official power with 
which they are clothed was made the keystone of the American 
Nation, and Abraham Lincoln, on a most solemn occasion, said: 

If by the mere force of numbers a majority should deprive a minority of any 
clearly written constitutional right, it might, in a moral point of view, justify 
revolution certainly would if such a right were a vital one. 2 

The grave danger in the United States is that on account of the 
enormous area and the sense of isolation of each section as regards 
the others, the encroachment upon fundamental rights and 'the sub- 
version of local governments will be permitted to gain ground with- 
out the effective protest of the entire Nation until the liberties of all 
itizens are hanging in the balance. 


6. The commission devoted a great deal of attention to the ques- 
tion of a State constabulary as a method of policing industry. Ex- 
tensive investigations of the "organization, personnel, and activities 
of the, Pennsylvania State Constabulary were made and a number of 
witnesses were heard at length. The findings with regard to this 
particular police organization may be briefly stated: It is an ex- 
tremely efficient force for crushing strikes, but it is not successful in 
preventing violence in connection with strikes, in maintaining the 
legal and civil rights of the parties to the dispute, nor in protecting 
the public. On the contrary, violence seems to increase rather tham 
diminish when the constabulary is brought into an industrial dis- 

1 See report of B. F. Moore : Application of Writ of Habeas Corpus in Labor and 
fonlabor Cases. 

2 Inaugural address, Mar. 4, 18G1. 

38810 16 7 


pute; the legal and civil rights of the workers have on numerous 
occasions been violated by the constabulary ; and citizens not in any 
way connected with the dispute and innocent of any interference with 
the constabulary have been brutally treated, and in one case shot 
down by members of the constabulary, who have escaped punishment 
for their acts. Organized upon a strictly military basis, it appears 
to assume in taking the field in connection with a strike that the 
strikers are its enemies and the enemies of the State, and that a cam- 
paign should be waged against them as such. 

There are certain features of the State police system, however, 
which seem to be preferable to the present haphazard methods of 
policing strikes. It is desirable, first, that all kinds of police should 
receive their entire compensation from the State; second, an or- 
ganized force, whose records are known, is preferable both to the 
private police of corporations and to the deputies ordinarily sworn in 
by sheriffs ; third, it is desirable that the force should be strictly dis- 
ciplined and subject to definite orders; fourth, it is desirable that 
those in command of any police force should have a reasonable secure 
tenure of office and should have had previous experience under similar 
circumstances, as an inexperienced person is likely to become panic 
stricken by the mere presence of crowds, regardless of their actions. 

If these desirable features could be combined with other features 
which would insure their impartiality during industrial disputes, and 
raise their ideals from the present militaristic basis to the police 
basis of preserving the peace and protecting the rights of both parties 
and the public, the establishment of State police systems for use in 
connection with industrial disputes might be recommended. But 
under present conditions, it seems desirable rather to leave the State 
policing of industrial disputes to the sheriffs and the militia if the 
restrictions hereinafter suggested are rigidly enforced so as to pro- 
tect both the organization and the personnel from partisanship. 


7. One of the greatest sources of social unrest and bitterness has 
been the attitude of the police toward public speaking. On numer- 
ous occasions in every part of the country the police of cities and 
towns have, either arbitrarily or under the -cloak of a traffic ordi- 
nance, interfered with or prohibited public speaking, both in the 
open and in halls, by persons connected with organizations of which 
the police or those from whom they receive their orders did not ap- 
prove. In many instances such interference has been carried out 
with a degree or brutality which would be incredible if it were not 
vouched for by reliable witnesses. Bloody riots frequently have 
accompanied such interference, and large numbers of persons have 
been arrested for acts of which they w^ere innocent or which were 
committed under the extreme provocation of brutal treatment of 
police or private citizens. 

In some cases this suppression of free speech seems to have been 
the result of sheer brutality and wanton mischief, but in the majority 
of cases it undoubtedly is the result of a belief by the police or their 
superiors that they were " supporting and defending the Govern- 


ment" by such an invasion of personal rights. There could be no 
greater error. Such action strikes at the very foundation of govern- 
ment. It is axiomatic that a government which can be maintained 
only by the suppression of criticism should not be maintained. Fur- 
thermore, it is the lesson of history that attempts to suppress ideas 
result only in their more rapid propagation. 

Not only should every barrier to the freedom of speech be removed, 
as long as it is kept within the bounds of decency and as long as the 
penalties for libel can be invoked, but every reasonable opportunity 
should be afforded for the expression of ideas and the public criti- 
cism of social institutions. The experience of Police Commissioner 
Woods, of New York City, as contained in his testimony before this 
commission, is convincing evidence of the good results which follow 
such a policy. Mr. Woods testified that when he became commis- 
sioner of police he found in force a policy of rigid suppression of 
radical street meetings, with the result that riots were frequent and 
bitter hatred of the police was widespread. He adopted a policy of 
not only permitting public meetings at all places where traffic and 
the public convenience would not be interfered with, but instructing 
the police to protect speakers from molestation ; as a result, the riot- 
ing entirely ceased, the street meetings became more orderly, and the 
speakers were more restrained in their utterances. 

It is suggested that the commission recommend as measures de- 
signed not only to remove the causes which lead to violence but to 
promote the impartial and effective action of police during disputes : 

1. The enactment by ' Congress of a statute prohibiting, under 
severe penalties, the transportation of men from State to State, either 
under arms or for the purpose of arming them, as guards or as agents 
either of employers or of employees. 

2. The enactment by Congress of a statute prohibiting the ship- 
ment in interstate commerce of cannon, gatling guns, and other guns 
of similar character, which are not capable of personal use, when 
consigned to anyone except military agencies of the State or Federal 

3. The regulation or prohibition of private detective agencies and 
private employment agencies as hereinbefore suggested. 

4. The strict enforcement in all public and private employment 
offices of the rules requiring full notice of the existence of a strike. 

5. The complete assumption by the States and municipalities of the 
responsibility for policing, and the prohibition of the maintenance 
of any private police (except a limited number of watchmen without 
police power except on premises). 

6. The definition by statute, by the States, of the conditions under 

k which sheriffs may deputize, such regulations to include provisions 
that a deputy must be a bona fide resident of the State, that a sworn 
statement of the complete activities of each deputy covering a period 
of 10 years immediately preceding his deputization shall be filed with 

I the secretary of state, that no person who shall have been convicted of 
any misdemeanor or who shall have been imprisoned in any State 
shall be deputized, and that no deputy shall receive any money or any 
other thing of value from any person connected with an industrial 
dispute during his period of service or in connection therewith. 


7. The enactment of statutes, by the States, providing a uniform 
code governing the militia and embodying the following principles : 

(a) A proclamation of martial law or a state of war, insurrec- 
tion, or rebellion, by the governor of a State, as the result of an in- 
dustrial dispute, shall have no effect upon the continuance of consti- 
tutional guaranties of the State and Federal Constitutions, nor upon 
the law and statutes, nor upon the jurisdiction of the courts, nor upon 
other civil authorities. 

(6) The writ of habeas corpus or other process of the courts can 
not be suspended, interfered with, nor disregarded by the military. 
It is part of the duty of the military to assist in enforcing the process 
and decrees of the civil courts. 

(c) The ordinary courts shall have exclusive jurisdiction for the 
punishment of crime, and in all cases where the same act constitutes 
an indictable offense under both military and criminal law, court- 
martials shall have no jurisdiction nor authority to try officers or 
soldiers accused thereof, but the offender shall be turned over to the 
civil magistrate for trial. 

(d) The military may not hold, detain, nor imprison persons 
arrested by them any longer than is necessary to hand them over to 
the civil authorities. No person arrested by the militia shall be de- 
tained after noon of the following day without being brought before 
a committing magistrate. 

(e) The military may not forcibly enter nor search a private house 
in order to -seize arms or other property concealed therein without 
a search warrant. 

(/) The military shall have no authority to establish a censorship 
over the press nor to interfere with the publication of newspapers, 
pamphlets, handbills, or the exercise of the right of free speech, 
except under process of the courts. 

(g) The military shall not limit, restrict, nor interfere with the 
freedom of movement of peaceable citizens or the rights of public 
meeting, assemblage, or parades in streets and public highways or 
elsewhere, except under due process of law. 

(Ji) Every military officer under whose orders a civilian is ar- 
rested shall within 24 hours thereafter report in writing to the com- 
manding officer the name of the prisoner, the offense with which he is 
charged, and what disposition has been made of him. Failing, he 
shall be liable to such punishment as a court-martial may direct. 

(i) In times of industrial disputes no private guards, detectives, 
nor employees of either of the contending parties shall be enlisted 
or employed as members of the militia, and* all persons found by the 
commanding officer to be in the employment of either party to a 
dispute or actuated by animosity or personal ill will toward either of 
the contending parties shall be forthwith released from active service. 

(j) The governor may, in times of disturbance, by proclamation 
forbid the sale or transportation of firearms, ammunition, and in- 
toxicating liquors, and may require all firearms and other weapons 
to be deposited with the military at certain places, receipts being 
given therefor. Proper search warrants may be issued to discover 
concealed weapons. 

8. That the States and municipalities should provide by law for 
the fullest use of schools and other public buildings for public meet- 
ings and lectures and for other similar purposes. 



It has been found as a result of the commission's investigations, 
which were made chiefly by Mr. P. A. Speek : 

1. There are large numbers of American workers, in all prob- 
ability several millions, who are not definitely attached either to any 
particular locality or to any line of industry. These migratory work- 
ers are continually moving from one part of the country to another 
as opportunity for employment is presented. 

The great movements of these workers are seasonal in character, 
as, for example, the movement of harvest hands during the summer 
and autumn, the movement to the lumber and ice camps in the 
winter, and the movement to the construction camps in the spring 
and summer. In addition there are large, irregular movements of 
laborers W 7 hich are produced by the depression in different trades 
and localities, and movements due to false rumors about opportuni- 
ties and to the men's acquired habits of migration. 

2. The number of these migratory workers seems to be increasing 
not only absolutely but relatively. 'There are no available figures to 
show this conclusively, but it is the general opinion of students of 
the subject and of the migratory workers themselves that a rapid in- 
crease in their number is taking place. 

3. A considerable proportion of these migratory workers are, 
unquestionably^ led to adopt this kind of a life by reason of per- 
sonal characteristics or weaknesses, and these personal weaknesses 
are accentuated rather than diminished by the conditions under 
which they live and work. Nevertheless, even if the migratory 
workers w r ere all men of the highest character and reliability, there 
would still be a demand from our industries for the movement of 
the population in almost as great numbers as at present, in order 
to supply seasonal demands and to take care of the fluctuations of 

4. An increasingly large number of laborers go downward instead 
cf upward. Young men, full of ambition and high hopes for the 
future, start their life as workers, but meeting failure after failure in 
establishing themselves in some trade or calling, their ambitions and 
hopes go to pieces, and they gradually sink into the ranks of migra- 
tory and casual workers. Continuing their existence in these ranks, 
they begin to lose self-respect and become "hoboes." Afterwards, 
acquiring certain negative habits, as those of drinking and begging, 
and losing all self-control, self-respect, and desire to work, they be- 
come " down-and-outs " tramps, bums, vagabonds, gamblers, pick- 
pockets, yeggmeu, and other petty criminals in short, public para- 
sites, the number of whom seems to be growing faster than the gen- 
eral population. 

5. The movement of these migratory workers, at the present time, 
is practically unorganized and unregulated. Workmen in large num- 
bers go long distances in the hope of finding employment on the basis 
of a mere rumor, and frequently find that there is' either no work or 
work for only a few. At the same time the demand for labor in a 

f~ : ven locality or industry remains unfilled, because the workers have 
iled to hear of the opportunity. In fact, a large part of the move- 
ent of migratory workers at present is determined not by the de- 
ands of industry for labor, but by the necessity to search for work. 




To illustrate: A man finds himself out of work in a given locality 
because of the termination of the busy season, because of business 
depression, or because of his personal discharge; he is unable to se- 
cure employment in the locality, and he has no information regard- 
ing opportunity for work elsewhere. If he remains in the locality- 
he is almost certain to be arrested as a vagrant. His only recourse 
is to start moving, and the direction of the movement is usually de- 
termined by chance. 

6. The attempts to regulate the movements of migratory workers 
by local organizations have, without exception, proved failures. 
This must necessarily be true no matter how well planned or well 
managed such local organizations may be. 

7. The problem can not be handled except on a national scale and 
by methods and machinery which are proportioned to the enormous 
size and complexity of the problem. 

The basic industries of the county, including agriculture and 
railroad construction work, are absolutely dependent upon these 
migratory workers. 

8. The conditions under which migratory workers live, both in the 
cities and at their places of employment, are such as to inevitably 
weaken their character and physique, to make them carriers of dis- 
ease, and to create in them a habit of unsteadiness and migration. 

The provisions for housing and feeding workers in the labor 
camps are subject to severe criticism, while the lodging houses in 
the large cities are even worse, especially from the viewpoint of 
morals. One season spent in a city lodging house is generally suffi- 
cient to weaken the physique and destroy the moral fiber of even 
the strongest man. Numerous instances of the spread of dangerous 
diseases by migratory workers also have been brought to the notice 
of the commission. 

9. The available information indicates clearly that even the most 
perfect distribution of workers, in accordance with the opportunities 
afforded at present by American industries, will still leave enormous 
numbers unemployed during certain seasons of the year and during 
periods of industrial depression. 

10. The congregation of large numbers of migratory workers in 
large cities during the winter should be avoided, if possible, not only 
because they are an unjust burden upon the cities but because of the 
degenerating effects of city life during long periods of idleness. 

11. The movement of migratory and seasonal workers is caused 
chiefly by the seasonal demand of industries and by the men's search 
for work, and, to a degree, by their aimless desire to move about. 
The conditions of their transportation have become grave. Millions 
of men annually have to, and are allowed to, resort to such a method 
of movement as stealing rides on the railways. This method of 
transportation results in the demoralization and casualization of 
workers, in their congestion in industrial and railway centers, in 
waste of their time and energy, in frequent bodily injuries and 
numerous fatal accidents and homicides annually, while, at the same 
time, it serves but poorly the industrial demand for help. 

12. When the workers return to the city, from labor camps, for 
instance, either to rest or to spend the time between seasons, they not 
only meet the unhealthy and demoralizing influence of cheap lodging 


houses, saloons, houses of prostitution, and other similar establish- 
ments in the slums, but they fall easy prey to gamblers, small private 
bankers, and all sorts of parasites. As a result, what earnings they 
have left after deduction of their living expenses at work places 
rapidly disappear, no matter how large these earnings may be. 

The principal recommendations for dealing with the problem of 
migratory workers are outlined under the head of unemployment. 
In this immediate connection, however, it seems desirable to suggest 
three necessary measures: 

1. The Interstate Commerce Commission should be directed by 
Congress to investigate and report the most feasible plan of pro- 
viding for the transportation of workers at the lowest reasonable 
rates and, at the same time, measures necessary to eliminate the 
stealing of rides on railways. 

If special transportation rates for workers are provided, tickets 
may be issued only to those who secure employment through public 
employment exchanges. 

2. The establishment by States, municipalities and, through the 
Department of Labor, the Federal Government, of sanitary work- 
ingmen's hotels in which the prices for accommodation shall be ad- 
justed to the cost of operation. If such workingmen's hotels are 
established, the Post Office Department should establish branch 
postal savings banks in connection therewith. 

3. The establishment by the municipal, State, and Federal Gov- 
ernments of colonies or farms for " down and outs," in order to 
rehabilitate them by means of proper food, regular habits of living, 
and regular work that will train them for lives of usefulness. Such 
colonies should provide for hospital treatment of cases which re- 
quire it. 


The extent and character of unemployment has been briefly pre- 
sented in a previous section, but the discussion there dealt only 
with the larger aspects of the situation in general terms. It re- 
mains to present at this point, in summary fashion, the ^ findings 
which have resulted from the extensive investigations which have 
been conducted for the commission, principally under the direction 
of Dr. William M. Leiserson, together with certain specific recom- 
mendations relating to the organization of the labor market and the 
regularization of employment. 


1. Wage earners in the principal manufacturing and mining in- 
dustries in the United States lose on the average from one-fifth to 
one-fourth of the working time during the normal year. 

This is the conclusion indicated by an examination of practically 
all of the published material, and of the hearings of the commission, 
relating to loss of time, irregularity of employment, and unem- 

2. Excluding the extremely seasonal industries, such as canning, 
harvesting, lumber cutting and logging, which operate normally 
only a part of the year, the amount of lost working time varies 


greatly for workers in different industries and in different occu- 
pations and trades. Loss of time appears to be greatest in bitumin- 
ous coal mining, iron and steel manufacturing, leather, woolen and 
worsted clothing, slaughtering and meat packing, and in other in- 
dustries where the proportion of unskilled labor is large. 

3. It has been found that the lowest-paid worker is subject to the 
greatest loss in working time, not simply because he is unskilled but 
also because he is poorly nourished and weakened by the effects of 
unfavorable conditions of living and, in many instances, by unbear- 
ably severe conditions of work. 

The tendency in the evolution of modern industry toward the em- 
ployment of a larger proportion of unskilled labor, as well as the 
fact that many industries have come into existence because of the 
availability of a supply of casual laborers and of woman and child 
workers who are willing to work for less than subsistence wages, 
points to a greater degree of irregularity of employment, unemploy- 
ment, and less of working time, than ever before. 

4-. The actual number or proportion of workers at any given time 
who are unable to work can not be estimated, because of the lack of 
adequate data in this country. Recent investigations by Federal 
authorities and the statements of competent authorities before the 
commission, however, prove beyond doubt that the number of unem- 
ployed persons even in normal times is appallingly great. The sta- 
tistics of highly organized trades show that even in times of greatest 
industrial activity there is a considerable percentage, ranging from, 
7 to 15 per cent of all of the members of unions in different trades 
and industries, of workers who are unemployed during the year. In 
any } r ear the unemployed who congregate in the large cities alone 
during the winter months number several hundred thousand, while 
in years of industrial depression the number of unemployed in the 
entire country is at least three million. 

5. The loss in working time is of two principal classes: Lack of 
work and sickness. Lack of work, which may mean the inability of 
the worker to find employment as well as the absence of a demand 
for labor of any particular kind or even of all kinds, either in a 
locality or section or in the country as a whole, accounts for approxi- 
mately two-thirds of the average worker's loss of time at work, 
according to the available data on this point ; ill health, according to 
several intensive investigations of wage w r orkers and their families 
and the examination of the sick records of nearly a million wage 
earners in this country, accounts for approximately one-fourth of 
the loss in working time. Strikes appear to be the cause of less than 
two per cent of the loss in working time, and accidents are the cause 
in about the same proportion. 

6. In addition to the two basic causes of unemployment unjust 
distribution of income and land monopolization which were ana- 
lyzed in detail in an earlier section of the report, the following 
causes demand attention: 

(a) Evolutionary changes in industry and in social habits and 
movements which affect the character and the extent of the demand 
for labor as well as the character and the quantity of the supply of 
labor. These include changes in industrial structure and methods 
such as the increase or decrease in the demand for labor in certain 
industries and localities, the introduction of machinery and new 


processes, and the changes in the character of the demand for labor 
and changes in the organization of industry. The character and 
quantity of the supply of labor have been affected by immigration 
and by the entrance into industry of women workers, both of which 
factors have caused an increase in the supply of cheap and unskilled 
labor. To some extent, however, the labor supply is fluid because 
of the ease with which considerable proportions of immigrants can 
withdraw from the labor market by returning to their homes in 
times of industrial inactivity. 

(b) Variations in the demand for labor due to fluctuations and 
irregularities in industry. Industrial fluctuations may be classed as 
cyclical and seasonal. Cyclical fluctuations result from business de- 
pressions and at times double the amount of loss of time during a 
year, which is illustrated by the fact that the railroads employed 
236,000 fewer men in 1908 than in 1907. Seasonal fluctuations may 
either be inappreciable, as in municipal utilities, or may displace 
nearly the entire labor force. The seasonal fluctuations in the can- 
ning industry in California, for example, involve nearly nine-tenths 
of all the workers; in logging camps, which depend upon the snow, 
operations are practically suspended in summer; while in the brick 
and tile industry only 36.5 per cent of the total number of employees 
are retained during the dull season. Irregularities in the conduct of 
industry and in the method of employing labor are evident in dock 
work, in the unskilled work in iron and steel, and in slaughtering 
and meat packing; in the competitive conditions in industries which 
force employers to cut labor cost down to the utmost and to close 
down in order to save operating expenses; in speculative practices 
which result in the piling up of orders and alternate periods of rush 
production and inactivity ; in loss of time due to inefficient manage- 
ment within plants. In some cases it has been charged although 
without definite proof, that irregularity of employment is due to a 
deliberate policy of employers in order to lessen the chance of organ- 
ized movement, as well as to keep the level of wages down in un- 
skilled occupations by continually hiring new individuals, 

(c) Conditions determining the worker's ability to grasp or retain 
the opportunity to be employed which industry offers. Among these 
conditions are ill health, old age, deficiencies in industrial training, 
lack of facilities by which the worker and the job can be brought 
together, factors causing immobility in the labor supply and its in- 
ability to adjust itself to changes in the character of the demand for 
labor, and those personal factors, such as dishonesty, laziness, intem- 
perance, irregularity, shiftlessness and stupidity, which are com- 
monly included under the term " deficiencies of character." By no 
means are all of these conditions under the control of the worker; 
in fact, the further investigation goes the greater appears the re- 
sponsibility which society and the employer bear for the conditions 
that determine the worker's ability to retain whatever employment 
industry is able to offer regularly. 

7. The effects of the loss in working time and the attendant 
irregularity of employment may be summed up in the term "the 
workers' economic insecurity." Specifically the effects, as shown by 
study of the results of various investigations and by testimony 
jfore the commission, may be summarized as follows: 


(a) Actual loss of earnings, which in turn results in the necessity 
for the supplementing of family income by the earnings of women 
and children, and by payments from boarders and lodgers whose 
presence is inimical to family life. 

(b) The depression of the wage level, in some instances, and the 
preventing of higher wages. 

(c) Waste in expenditure, due to irregularity of family income. 

(d) Deleterious effects upon the worker, such as demoralization, 
worry, loss of skill, irregularity of habits, etc. 

(e) The gradual loss of economic status by workers who are 
thrown out of employment and the inevitable drift of a large propor- 
tion into the class ordinarily known as " casual laborers," the con- 
stant recruiting of the large army of dependents and delinquents 
who compose the unemployables, and the general loss of national 
efficiency that so great a number of incapable citizens must entail. 

{/) The existence of a supply of casual laborers and irregularly 
employed women and children, upon which parasitic industries, un- 
able to exist unless they pay wages below the standard of decent 
subsistence, are called into being. 


8. In addition to the large variations which affect entire indus- 
tries, there is an ever present and equally difficult problem in the 
unsteadiness of employment. The existing methods of hiring and 
discharging employees, and the constant changing of positions by 
th workers themselves, divide the work among a much larger num- 
ber of employees than are actually needed. Instead of one person 
being employed where there is work for but one, several are hired 
during the course of the year to occupy the same position. Thus an 
investigation of the cloak and suit industry of New York showed 
that the maximum number of employees in 16 occupations during 
any week of the year was 1,952. Actually, however, the pay rolls 
showed that 4,000 people were employed in these occupations. This 
" turnover " of the labor force, the constant shifting from job to job, 
the dropping and hiring of men, is peculiar to no industry. It is 
found everywhere, among women as well as men, and it is a kind of 
irregularity of employment that is a constant factor. A large mail- 
order house which began the year with about 10,500 employees and 
ended with about the same number, engaged during that year 8,841 
people in order to maintain their force. A manufacturing estab- 
lishment employing in 1913 an average of 7,200 people, hired 6,980 
during that year. An automobile factory was reported in 1912 to 
have hired 21,000 employees in order to maintain an operating force 
of 10,000. A large steel plant employing about 15,000 men hires 
normally an equal number to maintain that force. During the years 
when it wanted to increase the force three and one-half times as many 
were hired as were actually needed to make up the increase. In 
some lumber camps and sawmills on the Pacific coast all men are 
discharged twice a year, in July and December, and complete new 
forces are hired when work is resumed. In the logging camps it is 
customary to hire five men in the course of the season to keep one 
job filled. 


A manager of a large electrical works made a study of a group of 
representative factories (large, small, and medium) in the mechan- 
ical industries and found that to increase their working force by 
8,128 people in the year 1912, they actually hired 44,365 people ; that 
is to say, five and one-half times the number actually needed to make 
up the increase were hired and 36,237 were dropped from the rolls 
for one reason or another. 

9. Detailed investigations show that a majority of the employees 
dropped from the pay rolls leave of their own accord. But there is 
no doubt that many of them leave because they were hired to do work 
for which they were unfitted; arid many others, without actually 
being discharged, leave because work is slack or threatens to become 
slack. In the lower paid and more disagreeable jobs there is almost a 
constant shifting of employees because no one works at these jobs 
except during those periods when he is helpless and can get no other 
work. Whatever the reason is for the men quitting, there is no doubt 
that conditions of employment and methods of hiring and discharg- 
ing employees have very much to do with causing a large " turnover " 
of the labor forces. Those employers who have given attention to 
this question of hiring and discharge have been able to reduce the 
" turnover " very greatly, and thus make employment more steady. 

10. The problem of unemployment has never received adequate 
attention, apparently because it has been believed generally that it 
affected only a small part of the working population. Such a belief 
is absolutely false. Not only is practically every wage earner in con- 
stant dread of unemployment, but there are few who do not suffer 
bitterly many times in their career because they are unable to get 
work. Every year from 15,000 to 18,000 business enterprises fail and 
turn their employees out; every year new machinery and improved 
processes displace thousands ; cold weather and wet weather and hot 
weather stop operations and force wage-earners into idleness; and 
where there are not these natural causes there are the customs and 
habits and holiday rushes which result in overwork followed by 
underemployment. Employers change the locations of their plants 
and conditions of credit and currency cause depressions and shut- 
downs and short-time and part-time work. Constantly the methods 
of hiring and discharging employees are causing people to be dropped 
from the pay rolls. All these facts in connection with the conserva- 
tive figures of fluctuation in the amount of employment prove that 
" the unemployed " eventually include practically every wage-earner, 
and not alone a surplus portion. 

11. Practically all wage-earners are affected by the fluctuations of 
industry. To count the number of the unemployed at any given time 
becomes almost impossible, since the number is changing from day to 
day. The unemployed of to-day are the workers of to-morrow, and 
vice versa. 

The permanently unemployed are really people who have dropped 
out of the ranks of industry, broken down by the unsteadiness of 
employment or other causes. Some are mentally defective or physi- 
cally incapable or both. Others are " down and outs," who have 
lost the habit of working. Still others live by their wits, by begging, 
or by crime. During the most prosperous times, when labor is in 
great demand, these same people do not work. They are "unem- 


ployed" in the same sense that young children, the old, and the sick, 
and those who live on incomes from investments, are unemployed. 
No amount of work that might be provided by public or private 
enterprise would have any appreciable effect on these unemployables. 
They need hospital or corrective treatment. In prosperous times 
they are considered the subjects of such treatment, but in every 
period of industrial depression they stand out as the most conspicuous 
element in the " army of the unemployed." 

The failure to distinguish these unemployables from those who are 
temporarily out of work on account of a slack season or the failure 
of a firm and those casual workers who are employed for part of 
every week or month, leads to hopeless confusion. 

12. The fluctuations in business affect capital as well as labor, but 
the result is entirely different. Capital suffers the same fluctuations 
and every industry has its "peak loads." The essential differences 
are, first, that a fair return on investments is estimated by the year, 
while for labor it has become more and more customary to hire and 
pay and discharge by the week, day, or hour, or by the piece, and, 
second, that w r hile capital can offset the fat years against the lean, 
the human beings who are unemployed can not, but must starA T e or 
suffer a rapid physical and moral deterioration. The result is that 
unless the wage earners are very strongly organized and the vast 
majority are not they must bear the whole burden of the waiting 
period when they must act as a reserve force ready to meet the maxi- 
mum demand of the busy season. We dp not consider policemen 
unemployed when they are not arresting violators of the peace, and 
we do not consider firemen out of work when they sit in the fire- 
houses prepared to do their duty. But for most working people 
industry is still conducted on a sort of volunteer fire department 
basis. In the busy seasons and prosperous years all are desirable 
and useful citizens. At other times they are useless and worthless, 
so far as our industries are concerned. They are turned adrift to 
take care of themselves and those dependent on them as best they can. 


13. The first step in any intelligent attempt to deal with the prob- 
lem is the organization of the labor market on a systematic business- 
like and efficient basis. 

14. Labor exchanges can not create work nor make the existing 
irregular demand for labor steady the year through, but they can, 
if properly managed, remove the unnecessary loss of time which 
workers now suffer in passing from one job to the next; they can 
eliminate the numberless evils which now characterize private em- 
ployment offices ; and they can provide the information and adminis- 
trative machinery which is essential to every other step in dealing 
with the problem. 

15. The absurdity and waste w r hich characterizes the existing sys- 
tem of marketing labor can best be appreciated by imagining the 
condition which would be produced if every manufacturer who 
needed lathes, drill presses, planers, and milling machines advertised 
for them in the papers, and many machines were sent to him, out 
of which he could pick the few 'he wanted. Yet that is exactly 
what happens when machine hands, human beings, are wanted; 

a r 





when the calls go out for harvest hands or when any other class of 
labor is advertised for. No one knows 'how many will answer the 
advertisement. Many more than the number needed respond to the 
calls. The waste of time, energy, car fare, and railroad fare to get 
to the places is enormous. Often men quit positions in the hope of 
getting the alluringly advertised work. Many employers do not even 
advertise. They simply hang the " Help wanted " sign at the door 
and depend on people to walk the streets and watch for these signs. 

16. Wherever systematic methods and intelligent organization and 
direction are lacking, there evils creep in to add to the chaos. That 
is exactly what we find has happened in the labor market. The 
saloon becomes one of the most important places in the country to get 
information about jobs. Pool rooms, cafes, grocery stores, lodging 
houses, even street corners and public parks become improvised 
labor markets. In these places many and strange abuses are met 
with. Groundless rumors send people scurrying over the city and 
the country on a wild-goose chase. One job seeker sells information 
to another, and quite often it is false or misleading. Foremen sell 
real or bogus jobs under their control. Fees for jobs are paid by 
buying drinks, and " man catchers " pick up victims to rob or abuse. 

17. Of all the evils, the wild rumors regarding available jobs are 
the greatest. These evils are increased by fake " want ads " in the 
newspapers, untruthful or innocently misleading advertisements for 
help, and new stories intended to boost towns or industries or to 
attract large supplies of labor. Investigators and men who were sent 
to answer " want ads " found many of these inserted by employment 
agents who had no jobs to offer but who wanted to collect registra- 
tion fees. Other advertisements were pure fakes, inserted by " white 
slavers," bogus real estate and stock brokers, selling agents of " new 
propositions," padrones, and other swindlers. A study of newspaper 
want advertisements made a few years ago revealed that when times 
are good one-fourth or more are " fake ads," while in hard times 
more than one-half are in this class, 

18. Private enterprise has attempted to deal with the situation 
through the establishment of employment agencies which gather 
information regarding opportunities for employment and sell the 
information to work seekers and, under certain conditions, collect 
fees also from employers. The number of private employment agents 
varies greatly from year to year, but there must be from 3,000 to 

,000 of these labor middlemen in the country. 

Investigations show, however, that instead of relieving unemploy- 

ent and reducing irregularity, these employment agencies actually 
serve to congest the labor market and to increase idleness and irregu- 
arity of employment. They are interested primarily in the fees they 

n earn, and if they can earn more by bringing workers to an already 
vercrowded city, they do so. Again, it is an almost universal custom 
mong private employment agents to fill vacancies by putting in them 

ople who are working at other places. In this way new vacancies 
re created and more fees can be earned. 

19. They also fail to meet the problem because they are so numerous 
and are necessarily competitive. With few exceptions, there is no 
cooperation among them. This difficulty is further emphasized by 

he necessity of paying the registration fees required by many 


agencies; obviously the laborer can not apply to very many if he 
has to pay a dollar at each one. 

20. The fees which private employment offices must charge are 
barriers which prevent the proper flow of labor into the channels 
where it is needed and are a direct influence in keeping men idle. 
In the summer, when employment is plentiful, the fees are as low 
as 25 cents, and men are even referred to work free of charge. But 
this must necessarily be made up in the winter, when work is scarce. 
At such times, when men need work most badly, the private em- 
ployment offices put up their fees and keep the unemployed from 
going to work until they can pay $2, $3, $5, and even $10 and more 
for their jobs. This necessity of paying for the privilege of going 
to work, and paying more the more urgently the job is needed, not 
only keeps people unnecessarily unemployed, but seems foreign to 
the spirit of American freedom and opportunity. 

21. An additional injustice inevitably connected with labor 
agencies which charge fees is that they must place the entire cost 
of the service upon those least able to bear it. Employment agents 
say that employers will not pay the fees ; hence they must charge the 
employees. Among the wage earners, too, however, those who are 
least in need and can wait for work, pay the least for jobs and even 
get them free, while those who are most in need make up for all the 
rest and pay the highest fees. The weakest and poorest classes of 
wage earners are therefore made to pay the largest share for a serv- 
ice rendered to employers, to workers, and to the public as well. 

22. The fees paid private employment agents in California in the 
license year ending March 31, 1912, amounted to $403,000. Using 
these figures as a rough basis, the fees for the country as a whole 
amount annually to $15,000,000. This enormous sum of money, 
which is being paid chiefly out of the meager earnings of domestic 
servants, clerks, and unskilled laborers, would be enough to support 
a system of public exchanges which would bring order out of the 
existing chaos. 

23. There are many private employment agents who try to con- 
duct their business honestly, but they are the exception rather than 
the rule. The business as a whole reeks with fraud, extortion, and 
flagrant abuses of every kind. The most common evils are as fol- 

Fees are often charged out of all proportion to the service ren- 
dered. We know of cases where $5, $9, $10, and even $16 apiece 
has been paid for jobs at common labor. In one city the fees paid 
by scrubwomen is at the rate of $24 a year for their poorly paid 
work. Then there is discrimination in the charges made for the 
same jobs. Often, too, men are sent a long distance, made to pay 
fees and transportation, only to find that no one at that place or- 
dered men from the employment agent. A most pernicious prac- 
tice is the collusion with foremen or superintendents by which the 
employment agent "splits fees" with them. That is, the foreman 
agrees to hire men of a certain employment agent on condition that 
one- fourth or one-half of every lee collected from men whom he 
hires be given to him. This leads the foreman to discharge men 
constantly in order to have more men hired through the agent and 
more fees collected. It develops the" " three-gang " method so uni- 
versally complained of by railroad and construction laborers, 


namely, one gang working, another coming to work from the em- 
ployment agent, and a third going back to the city. 

Finally, there is the most frequent abuse misrepresentation of 
terms and condition of employment. Men are told that they will get 
more wages than are actually paid, or that the work will last longer 
than it actually will, or that there is a boarding house when there 
really is an insanitary camp, or that the cost of transportation will 
be paid, when it is to be deducted from the wages. They are not told 
of other deductions that will be made from wages; they are not 
informed about strikes that may be on at the places to which they 
are sent, nor about other important facts which they ought to know. 
These misrepresentations, it must be said, are often as much the fault 
of the employer as of the labor agent. Also the employer will place 
his call for help with several agents, and each will send enough to 
fill the whole order, causing many to find no jobs. Labor agents and 
laborers alike are guilty of the misuse of free transportation fur- 
nished by employers to prospective help. And it is true also that 
many applicants perpetrate frauds on the labor agents themselves, 
as, for example, causing them to return fees when positions actually 
were secured. This is the result of the general feeling that the whole 
system of paying fees for jobs is unjust; and if they must pay in 
order to get work, then any attempt to get the fee back is justifiable. 

24. Attempts to remove these abuses by regulation have been made 
in 31 States, but with few exceptions they have proved futile, and at 
most they have served only to promote a higher standard of honesty 
in the business and have not removed the other abuses which are 
inherent in the system. Where the States and cities have spent much 
money for inspectors and complaint adjusters there has been con- 
siderable improvement in the methods of private employment agen- 
cies, but most of the officers in charge of this regulation testify that 
the abuses are in " the nature of the business " and never can be 
entirely eliminated. They therefore favor the total abolition of 
private labor agencies. This is also the common opinion among 
working people, and in several States attempts have already been 
made to accomplish this by law. 

25. It is significant that trade union members are practically never 
found among the applicants for charity during periods of unemploy- 
ment. They may be unemployed, but they are in some way cared for, 
either by having work found for them or by systematic or voluntary 
relief. Within each strongly organized trade, it may be said, the 
problem of connecting man and job is cared for fairly well. The 
union headquarters is the most common labor market for organized 
workers. Ordinarily, no systematic employment business is done, but 
many unions have out-of-work books in which the unemployed write 
their names, and it is part of the duties of the business agent of every 
union to be on the lookout for vacancies and to notify members seek- 
ing employment of the opportunities. Many unions also have travel- 
ing benefits to assist members in going from place to place. But 
when it comes to placing men outside of their own trades the unions 
are not successful as employment offices. 

Partly for this reason and partly for the reason that only a small 
part of the wage earners are in strongly organized trades, the trade 
unions occupy a minor place in the general labor market. 


26. Within recent years associations of employers have established 
employment offices in all the important cities of the country. The 
movement is spreading very rapidly, and there is hardly an important 
industrial center in the country that has not a bureau of this kind. 
These offices are supported out of the funds of the employers' associa- 
tions, and their services are free to working people. Most of them, 
however, do a very small employment business. 

Almost all of these offices owe their origin to the movement among 
employers to establish and maintain the so-called " open shop " or 
the " antiunion shop." Since their establishment, employers have 
discovered that such offices are very useful also in creating central 
clearing houses for labor, " constituting the shortest cut between 
supply and demand." This, however, is not their primary purpose, 
for nowhere have they extended their operations to include common 
laborers, who suffer most from disorganization of the labor market. 
These bureaus are merely divisions of the regular business of the 
employers' associations, and one of the main purposes of these as- 
sociations is to prevent the organization of their shops by trade- 
unions. The employment bureaus are established and -maintained to 
further this purpose. 

The empk^ment bureaus maintained by employers' associations, 
therefore, not only are of no practical value as a means of solving 
the problem of unemployment, but, on the contrary, because they are 
organized primarily to prevent the employment of skilled workmen 
who are distasteful to their members, are actual barriers to the free 
movement of labor. 

27. In every city there are religious and charitable organizations 
which attempt to find work for destitute persons. In connection 
with the charity societies of the larger cities, regular employment 
agencies are maintained, but very little business, comparatively, is 
done by these officers. Working people do not go to them, and em- 
ployers do not call for employees at such offices, except occasionally 
for men to do odd jobs, or when they agree to place someone as a 
favor to the charity workers. The main work of the charitable em- 
ployment offices is to find odd jobs for the unemployed who can not 
hold ordinary positions. They also help people handicapped by age, 
illness, or other physical or mental defect. Their primary purpose is 
charity. They may be said to have no effect whatever on employ- 
ment conditions for able-bodied workers. 

Until the State is ready and able to take proper care of its handi- 
capped, diseased, and subnormal members, the charitable employ- 
ment agencies and institutions will continue to be necessary, because 
labor exchanges properly organized on a business basis, whether by 
public or by private enterprise, can not deal with the handicapped 
classes of labor. Those who are physically or mentally unfit to hold 
positions should be sent to the places where they will get the relief 
they need and not to work which they would quit or from which they 
would be dismissed in a few days. 


28. In 1890 Ohio created the first public employment offices in this 
country. Since that time, such offices have been established in 23 
other States, and they are now in operation in about 80 cities. Most 



of them were created by State laws ; a few are municipal enterprises. 
They represent an expense to -the States and cities of about $300,000 
annually, and, according to their reports, they fill about 500,000 posi- 
tions a year. 

29. As a result of a very extensive investigation it has been found 
that the public employment offices of the United States, as a whole, 
are issuing inaccurate statistics. They are slipshod in recording in- 
formation about employers and employees. They cater too much to 
casual laborers and " down-and-outs," thus driving away the better 
class of workers. Too many are poorly housed, with insufficient 
lighting and ventilation. They fail to supplant private agencies or 
to lessen their exploitation of workers. They do not exchange in- 
formation even when closely located. They fail to bring themselves 
to public attention, either by advertising or otherwise, and they have 
failed to arouse public interest in their work. This is true of public 
employment offices taken as a whole, but there are some very bright 
exceptions. During the last few years, also, the labor departments 
have been devoting more attention to the work of public employment 
offices, and many improvements have resulted which show that the 
principles underlying the offices are sound, but that they have not 
been properly carried out. 

30. The reasons for the failure of most of the public employment 
offices are: 

First. The inefficiency and lack of training of the officials and 
clerks who operate the agencies. A public employment office must 
build up its work by soliciting business and giving service that is felt 
to be valuable ; otherwise little attention will be paid to it. For this 
purpose men of judgment and experience are necessary to carry on 
the work. It is a technical business requiring not a mere shuffling of 
applications but careful selection of applicants and thorough under- 
standing of the requirements of positions to which they are to be sent. 

Second. The offices have generally .been regarded as political spoils f 
with a consequent change of personnel after each election. 

Third. The salaries have been inadequate to attract competent men. 

Fourth. The public employment offices have been the objects of 
suspicion, if not of actual opposition, by employers and organized 
labor as well. Union men have feared that the offices might be used 
as strike-breaking agencies, or to lower wage rates. Employers, on 
the other hand, have feared that the offices might be used to fill their 
shops with union men and labor agitators. 

The activities of the Federal Department of Labor in connection 
with unemployment have been chiefly attempts to utilize the exist- 
ing machinery of the Bureau of Immigration and the Post Office 
Department for receiving the applications of men out of work, col- 
lecting information regarding opportunities for employment, and as 
far as possible referring idle men to opportunities for work. For this 
purpose the country has been divided into 18 zones, with a central 
office in each, which is in charge of an immigrant inspector. Appli- 
cations from employers and employees are received either directly 
or through a special arrangement with the Post Office Department. 

The statutory authority for the establishment of the system is 
contained in the act of 1907, creating a division of information in 
the Bureau of Immigration, broadened in scope by the act creating 

38819 16 8 


the Department of Labor. The opportunity to establish the system 
arose through the great decrease in immigration, which left a large 
part of the resources of the Bureau of Immigration available for 
this purpose. The system was established only in March, 1915, and 
it can not properly be judged on the results of this very limited 
experience. The most promising feature of the entire system is the 
arrangement which has been made for close cooperation with the 
National Farm Labor Exchange, which has been organized by the 
labor commissioners of the States in the wheat belt. No such close 
cooperation has yet been established with any other public employ- 
ment system and no effort has been made to regulate the abuses of 
the private exchanges which do business in two or more States. 

The following observations regarding the present scheme of the 
Department of Labor seem to be proper : 

(a) The system of zones and central offices is sound and affords a 
suitable framework for the development of the system. 

( b ) The operation of the system directly by the Bureau of Immi- 
gration is likely to deter a great many workmen from utilizing it, 
through a belief that it is intended only for immigrants. 

(c) The employers have generally assumed an attitude of suspi- 
cion toward the Department of Labor, which forms a great handicap. 

(d) The system does not yet provide for sufficiently close coopera- 
tion with the State and municipal employment offices. 

(e) The system of registering applications does not provide for 
the close personal contact which is necessary to ascertain the require- 
ments of the employer or to select the workman who is capable of 
filling such requirements. The success of every employment office 
depends upon this personal contact. 

(/) The qualifications demanded in the examination of immigrant 
inspectors are not designed to secure men who are properly qualified 
to operate public employment offices. 

(g) A. national employment .system should not have to depend 
upon the exigencies of the general immigration service. 

(h) The system can not attain efficiency until provision is made 
for the regulation of private agencies which operate in two or more 

(*) The successful operation of a national employment system can 
not be attained until provision is made for some form of cheap trans- 
portation, which will assure the prompt arrival of workers at points 
where they are needed and eliminate the present wasteful, dangerous, 
and demoralizing practice of workers riding on freight trains. 

(j) In order to secure the confidence of both capital and labor, the 
creation of national and local advisory committees consisting of 
employers and employees is advisable. Such committees would also 
be of great assistance through their knowledge of the local industrial 

It is suggested that the commission recommend : 

1. The enactment of appropriate legislation modifying the title 
of the Bureau of Immigration to " Bureau of Immigration and 
Employment " and providing the statutory authority and appropri- 
ations necessary for 

(a) The establishment of a national employment system, under 
the Department of Labor, with a staff of well paid and specially 
qualified officials in the main offices at least. 


(b) The licensing, regulation, and supervision of all private em- 
ployment agencies doing an interstate business. 

(c) The investigation and preparation of plans for the regulariza- 
tion of employment, the decasualization of labor, the utilization of 
public work to fill in periods of business depression, insurance against 
unemployment in such trades and industries as may seem desirable, 
and other measures designed to promote regularity and steadiness of 

2. The immediate creation of a special board made up of the prop- 
erly qualified officials from the Departments of Agriculture, Com- 
merce, Interior, and Labor and from the Board of Army Engineers 
to prepare plans for performing the largest possible amount of 
public work during the winter, and to devise a program for the 
future for performing during periods of depression such public work 
as road building, construction of public buildings, reforestation, irri- 
gation, and drainage of swamps. The success attending the construc- 
tion of the Panama Canal indicates the enormous national construc- 
tion works which might be done to the advantage of the entire 
Nation during such periods of depression. Similar boards or com- 
missions should be established in the various States and munici- 


The investigations of the commission conducted under the direc- 
tion of Dr. George E. Barnett, are the basis of the following conclu- 
sions : 

1. The number of trade unionists relative to the working popula- 
tion is steadily increasing, although in certain industries, on account 
of the opposition of the great corporations and hostile employers' 
associations, trade unionism is practically nonexistent. At present 
it may be roughly estimated that in manufacturing, mining, trans- 
portation, and the building industries, if the proprietary, super- 
visory, official, and clerical classes are excluded, 25 per cent of the 
workers 21 years of age and over are trade unionists. 

2. The effects of trade unionism on wages are undoubted. With- 
out some form of combination the wageworkers can not bargain on 
equal terms with their employers. During the past 15 years, a period 
of rapidly rising prices, wages in well-organized trades have kept 
pace with the rising cost of living, in contrast to the relative decline 
of the purchasing power of the wages received by labor generally. 

3. In the well-organized trades the hours of labor have been stead- 
ily reduced until at present eight hours is the normal working day 
for at least one-half of American trade unionists. It is significant 
of the influence of trade unionism on the length of the working day 
that it is exactly in those trades in which the trade unionists are a 
relatively small part of the total working force that they work long 
hours relatively to other trade unionists. 

4. As the unit of industry grows larger and the natural relation 
which exists between the small employer and his workmen disap- 
pears, the opportunity for unjustifiable discharges and petty tyran* 
nies enlarges. The result is distrust and enmity among the employees. 
The effective remedy is the organization of the workers and^ the 


establishment of a system of trade boards in which the workers are 
equally represented with power to deal with such questions. 

5. By means of mutual insurance in case of death, sickness, acci- 
dent, old age, and unemployment many trade unions have greatly 
improved the conditions of their members. The extension of such 
systems appears to be highly desirable. 

6. The trade union is a democratic institution and faces the same 
problems in securing efficient government that other democratic insti- 
tutions face. The theory of government which the American trade 
unions have adopted is the centralization of power in the national 
trade union as against the local unions. The successful carrying out 
of this plan of organization will eliminate the chief defects in trade 
union government. The control by the national union over strikes 
and the system of mutual insurance is already thoroughly established 
in the more important unions; it should be established in all other 

7. Unwarranted sympathetic strikes have undoubtedly been the 
cause of great annoyance and considerable economic loss to employers. 
The annoyance in such cases is particularly great, because no direct 
action by the employer can be taken; at best he can only use his 
influence with his associates or competitors. With the increasing 
control of the national officers over the local unions, this kind of 
strike seems to be decreasing both in extent and frequency. Such 
sympathetic action is deep-rooted in the sense of brotherhood which 
to a greater or less degree pervades and will not be completely 
eliminated until substantial justice exists throughout industry. 

8. A few trade unions exclude qualified persons from membership 
by high initiation fees or other devices. This policy is condemned 
by the more important unions and is prohibited by their rules. The 
evidence presented to the commission shows clearly that the policy 
of exclusion is antisocial and monopolistic and should be given up by 
those unions which practice it. 

9. In many trades the efficiency of the union depends upon the 
maintenance of the rule that all those working at the trade shall 
become members of the union. Where the union admits all qualified 
workers to membership, under reasonable conditions, such a rule 
can not become the basis of monopoly, and neither the rights of the 
individual nor the public interest are infringed by its enforcement. 

10. In some trades there are a considerable number of union rules 
which restrict the productivity of the worker. Some of these rules 
can be justified on the ground that they are necessary to the protec- 
tion of the health of the worker. There are some, however, which 
can not be defended; these rules are. antisocial and should be given 
up. Experience has shown that where industry is regulated by well- 
organized systems of joint agreements, such rules either disappear or 
greatly decrease in number and importance. These limitations of 
output should not, however, be considered as standing alone. The 
limitations of output by associations of employers and by individual 
corporations are equally antisocial and have far greater conse- 

11. Jurisdictional disputes are the occasion of frequent and costly 
strikes. The disputes of this character which have caused most in- 
jury are in the building trades. Up to the present, the efforts to 
lessen these disputes by -action of the national unions involved have 





argely failed. It is suggested that the commission recommend to 
the American Federation of Labor and to the national unions that 
newed and more effective eiforts be made to prevent such disputes. 
12. The essential condition for trade-union graft is the placing of 

rhe authority to call strikes or to levy boycotts in the hands of one 
person without adequate provision for supervision. This condition 
does not exist in many unions. There is abundant evidence to show 
that in very many cases it originates with employers who desire to 
secure an advantage over their competitors. The reason that graft 
is more prevalent in the building trades is that power is conferred on 
the business agent to call strikes without reference either to the rank 
and file or to the national officers. It has been testified by employers 
who have given much attention to this problem that any well-organ- 
ized association of employers can eliminate graft whenever its mem- 
bers desire to do so. As far as the unions are concerned the solution 
seems to lie in the increased participation of the rank and file in the 
activities of the organization and increased provisions for fixing 
responsibility upon their business agents. 



1. The commission finds that in the past 10 years there has been a 
rapid growth in employers' associations. These associations, exclud- 
ing those general associations which have been formed for the purpose 
of advancing the political, commercial, or legal interests of the em- 
ployers, may be divided into two classes, bargaining associations and 
hostile associations. The bargaining associations deal with the 
unions ; the hostile associations oppose collective bargaining. 

2. The formation of bargaining associations is essential to the 
existence of a satisfactory system of joint agreements. A consider- 
able number of employers, although accepting the results of the 
joint conferences in their trades, do not belong to the associations of 
employers. It is highly desirable that all employers whose establish- 
ments are run in accordance with the terms of a joint agreement 
should be represented in making that agreement. In many bargain- 
ing associations the control over the members is very weak. The 
association has no power of discipline except expulsion, and where 
participation in the making of the agreement is regarded as of little 
importance expulsion is an inadequate remedy. 

3. The hostile employers' association is a comparatively recent 
development. In many cases these associations were formed for the 
purpose of negotiating joint agreements with the unions, but after 
the failure of negotiations or the breakdown of an agreement they 
assumed their present form. In some cases associations which have 
been hostile have resumed relations with the unions. There is a 
strong tendency, however, for a hostile association after a few years 
to develop principles and policies which make any agreement with the 
unions impossible. The hostile association may be regarded, there- 
fore, as a distinct species with definitely fixed characteristics. 

t4. In the majority of hostile employers' associations, the basic 
rinciple is that the conditions of employment shall be determined 
^lely by the individual employer and the individual workman, but 
i actual practice this results uniformly in the dictation of conditions 


solely by the employer. The " declarations of principles " adopted 
by these associations declare, for example, that the "number of 
apprentices, helpers, and handy men to be employed will be deter- 
mined solely by the employer;" "employees will be paid by the 
hourly rate, by premium system, by piecework, or contract, as the 
employers may elect;" "since we, as employers, are responsible for 
the work turned out by our workmen, we must have full power to 
designate the men we consider competent to perform the work and 
to determine the conditions under which that work will be prose- 
cuted." Even as to wages these associations are unwilling to bargain 
collectively, since they refuse to recognize a minimum wage or any 
other standard form of wage, without which a collective agreement 
is impossible. 

5. In a few of the more highly centralized employers' associations 
wage rates are set by the association, although other conditions may 
be left to the individual employer. In these associations the principle 
of individual bargaining is modified to the extent that certain mini- 
mum conditions of employment are set by the association. 

6. The prime function of the hostile associations is to aid their 
members in opposing the introduction of collective bargaining. The 
most important device used by the members of the associations in 
resisting the attempts of the union to replace individual bargaining 
by joint agreement is discrimination against members of the union. 
Many of the associations have in their " declarations of principles " 
the statement that no discrimination will be made against any man 
because of his membership in any organization, but this rule is not 
enforced. Ordinarily members of the union are not discriminated 
against, but if the number of unionists increases in any shop until it 
becomes large, the employer is advised or decides on his own volition 
to hire no more members of the union. Moreover, any workman who 
is prominent in urging the others to form a union is likely to be 
dismissed. The aim of the association is to prevent in ordinary times 
such an increase in the number of unionists as will lead to a collective 
demand. The proposition is effective against collective action, as 
membership of an individual workman in a union constitutes no 
menace to the employer's power to control his business unless the 
individual can persuade others to act with him. 

7. Nearly all of the important associations maintain employment 
agencies. These bureaus enable the members of the association to 
select nonunionists for employment. 

8. Practically all of the associations maintain a secret-service 
department through which they are able to ascertain the increase 
in the number of the trade unionists and the feeling of the men. 
Through this information the association is able to forestall threat- 
ened strikes and any other attempt to secure collective action on the 
part of the workers. 

9. In some of the associations an attempt is made to induce the 
individual employer to change conditions when there is evidence 
that dissatisfaction exists among his workmen. Similarly some of 
the associations have been active in promoting safety systems and 
welfare systems. 

10. Inasmuch as the right of workers to organize in any manner 
that they see fit is fully recognized by society and has repeatedly 


been given a legal status in the decisions of even the. most conserva- 
tive courts, there is strong reason for holding that these hostile 
employers' associations, which are organized primarily for the pre- 
vention of organization, are not only antisocial but even perhaps 

It is suggested that the commission strongly recommend: 
1. The formation of strong and stable associations of employers 
for the purpose of negotiating joint agreements and otherwise deter- 
mining, upon a democratic and equitable basis, the fundamental 
problems of the trade. 


The investigations of the commission, conducted under the direc- 
tion of Dr. George E. Barnett, as well as the evidence presented at 
the public hearings, warrant the following conclusions: 

1. The conditions of employment can be most satisfactorily fixed 
by joint agreements between associations of employers and trade 

2. Where the association of employers and the union participating 
in the joint agreement cover the entire competitive district, it 
becomes possible to regulate the trade or the industry, not merely 
with reference to wages and hours, but with reference to unemploy- 
ment, the recruiting of the trade, and the introduction of machinery 
and new processes. The method of regulation by joint agreement 
is superior to the method of legislative enactment, since it is more 
comprehensive, is more elastic, and more nearly achieves the ideal 
of fundamental democracy that government should to the greatest 
possible extent consist of agreements and understandings voluntarily 
made. The method of legislative enactment is inapplicable to many 
trade problems, and even where it is supplemented by administra- 
tive regulation it is cumbersome. 

3. The essential element in a system of joint agreements is that 
all action shall be preceded by discussion and deliberation. If either 
party through lack of organization is unable to participate effectively 
in the discussion and deliberation, to that extent the system falls 
short of the ideal. Where a union or an employers' association 
delivers its demands in the form of an ultimatum and denies the other 
party an opportunity collectively to discuss the demands, a funda- 
mental condition of the joint agreement is lacking. 

4. The thorough and effective organization of the employers is 
lacking in many trades in which the workmen are well organized. 
It is highly desirable that such organization should be brought about. 

5. In a few trades agreements have been made which provide that 
the members of the union will not be allowed to work for any em- 
ployers who are not members of the employers' association. The 
usual result is that the employers' association restricts its member- 
ship or in some other manner artificially raises prices to the con- 
sumer. Such agreements are against the public interest and should 
not be tolerated. 

6. Joint agreements, on the whole, are well kept. There is a con- 
stant increase in the sense of moral obligation on the part of both 
employers and unions. Violations of agreements on the part of a 


small number of men or of a single employer occasionally occur. It 
is found that the unions tend more and more to punish by fines or 
other disciplinary measure such infraction on the part of their mem- 
bers. The great difficulty in the rapid solution of this problem is 
that even graver evils than contract breaking are apt to result from 
giving officials the power which they must have in order to punish 
properly individuals or local unions for illegal strikes. The em- 
ployers' associations, from the nature of the case, have less power 
over their members, but in practically all cases they exercise in good 
faith what power they have. Furthermore, since the employer in 
the first instance has the power to interpret the contract, which he 
may do unjustly, he may actually be guilty of the breach of contract 
when the employees who strike against such unjust interpretation 
are apparently the guilty parties. 

7. In certain agreements a specified money guaranty is made by 
each party, and in any breach of the agreement the guaranty is for- 
feited to the other side. On the whole, such guaranties do not serve 
a desirable purpose, since there is danger that the parties may come 
to regard the forfeiture of the guaranty as a compensation for the 
breach of the agreement. 1 The sense of moral obligation is thus 
seriously impaired. 

8. It does not seem, nor has it been urged by any careful student 
of the problem, whether employer or worker, that any good end 
would be served by giving legal validity to joint agreements. The 
agreements are formulated by parties acting without legal advice, 
and it not infrequently happens that the form of words adopted is 
capable of several constructions. In some cases the language is in- 
tentionally general, though its purpose may be fully understood by 
the different parties. It is not desirable that such agreements, the 
only ones possible under the circumstances, should be construed by 
the rigid rules customarily used in the courts. 

9. Every joint agreement should contain a clause providing for 
arbitration in the event that the interpretation of the agreement is 
in dispute. Under such provision the arbitrator would approach 
the question unhampered by strict rules of construction. The re- 
sponsibility for breaking an agreement would under such a plan be 
definitely located. 

It is suggested that the commission recommend : 

1. The extension of joint agreements as regards not only the field 
of industry which they cover and the class of labor included but the 
subjects which are taken up for negotiation and settlement. Greater 
responsibility for the character, skill, and conduct of their members 
should accompany the greater participation of trade-unions in the 
governing of industry. 


The result of the very extensive investigations which have been 
made regarding the agencies for mediation and arbitration in this 
country and abroad have been embodied in the plan for legislation, 
which is attached hereto. The plan as presented is limited to a 
national system, but it is recommended that the State legislatures 

1 This statement is not in accordance with the finding of Dr. Barnett, but is formed 
after consideration of the evidence and opinion of the British Industrial Council. 


should enact legislation along the same general lines. The general 
principles which have governed in drawing up this plan may be 
tated as follows: 

1. The Mediation Commission should be independent of and defi- 
nitely divorced from every other department of the State or Federal 
Government. Its only power grows out of its impartiality, and this 
can not be secured if it is subordinate to any other body whose 
sympathies either with labor or with capital can be questioned. 

2. Mediation should be entrusted to a person as far as possible 
distinct from those who act as arbitrators or appoint arbitrators. 

3. The office of mediator should be placed beyond the suspicion 
that the office is being used as a reward for party services. 

4. The mediator should appoint his own subordinates, 

5. It is desirable in the event of the failure of mediation by an 
official mediator that the parties should be asked to consent to the 
appointment of a board of mediation and investigation consisting 
of three persons, one selected by each party and the third by these 
(wo. Such a board, it appears, would be able to secure an agree- 
ment in many cases where the mediator fails. These boards should 
have power to summon witnesses and compel the production of 
papers. In the event that the board could not secure an agreement 
during the investigation, it should be empowered to make a public 
report stating the terms on which, in its judgment, the parties should 

6. In those cases in which the parties are unable to agree on the 
third member of the board of mediation and investigation, he should 
be appointed in the State systems by the State board of arbitration, 
and in the national system by the mediators, from a list prepared 
in advance by an advisory board consisting of 10 representatives of 
employers' associations and 10 representatives of trade unions. 

7. National boards of mediation and investigation are to be formed 
nly in disputes involving interstate commerce and in those cases 

in which the legislature or the executive of a State has requested 
the intervention of the Federal Government. 

8. The Secretary of Labor, or in the States the official bureau or 
commission, which is created for the protection of the workers, 
should be employed to appear before the board of mediation and 
investigation, when it is holding public hearings, either at the request 
of the board as amicus curiae in the ascertainment of facts regard- 
ing labor conditions, or, if appealed to, as the spokesman for the 
employees in the presentation of their case. 




1. Scope of authority. The National Mediation Commission 
should be given exclusive authority to intervene, under the conditions 
hereinafter defined, in all industrial disputes involving any corpora- 
tion, firm, or establishment, except public service establishments, 
which is engaged in interstate commerce or whose products enter into 
interstate or foreign commerce. 


This provision differentiates its functions from those of the media- 
tion commission existing at present under the Newlands Act. It is 
considered desirable for the present to provide for the existence of 
the two commissions, at least until the proposed commission has been 
thoroughly tested. It is believed to be wise, however, to provide for 
their close cooperation from the very beginning, with the idea that 
they will ultimately be consolidated. 

It will be noted that this provision also will have the effect of sup- 
planting the mediation powers which are now vested in the Depart- 
ment of Labor. There is no desire to criticise or belittle the past 
activities of the mediators operating under the Department of Labor, 
for such criticism is absolutely unwarranted. It is also freely- ad- 
mitted that the Department of Labor has not had either the time or 
the resources necessary for the proper development of .this function. 
The proposal is made, however, primarily upon three grounds which 
seem to be sound and, in fact, compelling: First, the function of 
mediation depends absolutely upon the permanent assurance of im- 
partiality. The Department of Labor was created to represent the 
interests of labor, and it seems not only inevitable but desirable and 
proper that the Secretary of Labor should always be drawn from the 
ranks of organized labor. The function of mediation may be admin- 
istered with absolute impartiality under any particular Secretary, 
or even under every Secretary, and yet it seems impossible, even 
under such conditions, to create that absolute assurance of impar- 
tiality which is the prime essential. Second, it is the prerogative and 
duty of the Department of Labor to act, aggressively if need be, for 
the protection of the workers at all times, and to utilize every resource 
at its command to giye them that protection. The Department must 
necessarily be greatly impeded in such frankly partisan action, it 
would seem, if it must at the same time preserve either the substance 
or the shadow of impartiality in carrying out its function of media- 
tion. Third, in the bitterest disputes, where the public interest 
most strongly demands intervention, mediation is seldom successful, 
and a stage is quickly reached where the most vital necessity is for 
the full and exact facts regarding the dispute, in order that public 
opinion may be intelligently formed and directed. Experience has 
shown that such facts can best be secured fully, quickly, and effec- 
tively through the medium of public inquiry. This means that the 
inquiring body must have power to summon witnesses, compel the 
production of books and papers, and compel testimony, or the pro- 
ceeding is worse than a farce. It may be regarded as certain that 
such powers will never be entrusted to the Department of Labor. 

2. Membership. The members of the Mediation Commission 
should be appointed by the President, with the advice and consent 
of the Senate. The members should represent in proper balance the 
interests of employers, employees, and the public. The members 
should serve for terms of six years. 

3. Advisory board. The President of the United States should 
designate an equal number of leading organizations of employers 
and leading organizations of employees to appoint representatives 
to act as an advisory body to the President, to Congress, and to the 
Mediation Commission. This body, designated hereinafter the ad- 
visory board, should give advice regarding the duties of the commis- 
sion, the administration of its affairs and the selection of mediators, 


and be empowered to make recommendations regarding legislation. 
The advisory board should also prepare lists of persons who may be 
called upon to serve on boards of arbitration and on boards of media- 
tion and investigation. The advisory board should be called together 
at least once a year by the chairman of the Mediation Commission; 
it should have an organization independent of the commission and 
elect its own chairman and secretary. 

The members of the advisory board should be paid traveling and 
other necessary expenses and such compensation as may be determined 
upon. Provision should be made for the removal of members by the 
organizations which they represent. 

4. Subordinate officers and assistants. The Mediation Commission 
should have power to appoint, remove at pleasure, and fix the com- 
pensation of a secretary (and a limited number of clerks). The 
appointment of other officers and assistants, such as mediators, exam- 
iners, investigators, technical assessors, experts, disbursing officer, 
clerks, and other employees, should be subject to the civil-service 
rules. But arrangements should be made to have the examination 
include experience and other proper qualifications, and to give the 
Mediation Commission power to examine all candidates orally. 


5. In interstate commerce. (a) Mediation: Whenever a contro- 
versy concerning conditions of employment arises between employer 
and employees engaged in interstate commerce .other than public 
service corporations, either party should be able to apply to the 
chairman of the Mediation Commission for its services in the bring- 
ing about of an amicable adjustment of the controversy. Or, the 
chairman of the commission should be authorized to offer, on his own 
initiative, the services of the mediators of the commission. If efforts 
to bring about an amicable adjustment through mediation should be 
unsuccessful, the commission should at once, if possible, induce the 
parties to submit their differences to arbitration. 

(b) Arbitration: Procedure should be similar to that outlined 
in the Newlands Act. If it is necessary for the Mediation Commis- 
sion to appoint arbitrators, they should Ibe taken from a list prepared 
by the advisory board. 

(c) Boards of mediation and investigation: If the parties to the 
controversy can not be induced to arbitrate, and if the controversy 
should threaten to interrupt the business of employers and employees 
to the detriment of the public interest, the commission should be 
authorized to request the two parties to consent to the creation of a 
board of mediation and investigation. If the consent of the parties 
to the controversy is secured, the commission shall form such a board. 
Of the three members of the board, one should be selected by the 
employers, one by the employees and a third on the recommendation 
of the members so chosen. If either side fails to recommend a mem- 
ber, he should be appointed by the commission. If after a stated 
time the third member is not recommended, the commission should 
select him. Appointments to boards of mediation arid investigation 
shall be made by the commission from a list prepared for fills pur- 
pose by the advisory board. The board of mediation and investiga- 
tion should offer its friendly offices in bringing about a settlement of 


the dispute through mediation. If mediation should not be success- 
ful and if the parties to the controversy refuse to arbitrate, this 
board should have power to make an investigation of the contro- 
versy, and should be required to submit to the commission a full 
report thereon, including recommendations for its settlement. The 
commission should be empowered to give this report and recommen- 
dations adequate publicity. 

(d) Powers to secure evidence: A board of mediation and inves- 
tigation should have power to administer oaths, to subpoena and 
compel the attendance and testimony of witnesses and the produc- 
tion of books, papers, documents, etc., and to conduct hearings and 
investigations, and to exercise such other similar powers as might be 
necessary. It should not have power to prohibit or to impose pen- 
alties for strikes or lockouts. 

6. Not in interstate commerce. It should be provided that the 
commission, or a board of mediation and investigation created by it, 
may exercise the foregoing powers except the compulsory powers 
under subdivision " d " of proposal 5, for settling industrial con- 
troversies between parties not engaged in interstate commerce, if 
they are requested to do so by the governor or legislature of a State, 
or by the mayor, council, or commission of a municipality. 

7. The Secretary of Labor and the Secretary of Commerce should 
be authorized to bring to the attention of the commission any dispute 
in which the intervention of the commission seems desirable. The 
Secretary of Labor, or such officer as he may designate, should also 
be authorized to appear before any board of mediation and investi- 
gation, either at the request of the board as amicus curiae for the 
ascertainment of facts regarding labor conditions, or, if appealed to, 
as a spokesman for the employees in the presentation of their case. 


8. Cooperation with State and local authorities. The commission 
should be authorized and directed to cooperate with State, local and 
territorial authorities and similar departments of foreign countries 
which deal with the adjustment of industrial disputes. 

9. Cooperation with other Federal agencies. The commission 
should, as far as practicable, coordinate its activities and cooperate 
with other Federal departments in the performance of their duties. 



The investigations which have been conducted by the commission 
under the direction of Dr. B. S. Warren, of the Public Health 
Service, are the basis for the following conclusions : 

1. Each of the thirty-odd million wage earners in the United 
States loses an average of nine days a year through sickness. At 
an average of $2 per day, the wage loss from this source is over 
$500,000,000. .At the average cost of ircdical expenses ($6 per capita 
per year) there is added to this at the very least $180,000,000. 

2. Much attention is now given to accident prevention, yet acci- 
dents cause only one-seventh as much destitution as does sickness 
and one-fifteenth as much as does unemployment. A great deal of 
unemployment is directly due to sickness, and sickness, in turn, fol- 


Ivvs unemployment. The commission's recent study in Indiana 
owed that 17.9 per cent of unemployment among women in stores 
that State was due to illness. In 1901, a Federal investigation 
25,440 workmen's families showed that 11.2 per cent of heads of 
milies were idle during the year on account of sickness, and that 
the average period of such unemployment was 7.71 weeks. Other 
investigations show that 30 to 40 per cent of cases requiring charit- 
able relief are immediately due to sickness. 

3. Sickness among wage earners is primarily the direct result of 
poverty, which manifests itself in insufficient diet, bad housing, 
inadequate clothing, and generally unfavorable surroundings in the 
home. The surroundings at the place of work and the personal 
habits of the worker are important but secondary factors. 

4. There are three general groups of disease-causing conditions: 
(1) Those for which the employer and character of the industry 
and occupation are responsible; (2) those for which the public, 

rough regulatory and relief agencies, is responsible; and (3) those 
r which the individual worker and his family are responsible. 

5. The employers' responsibility includes, besides conditions caus- 
ig so-called occupational diseases, low wages, excessive hours, meth- 
ds causing nervous strain, and general insanitary conditions. Many 

employers already partly recognize their responsibility; aside from 
" welfare work," many contribute liberally to employees' sick bene- 
fit funds or provide for the entire amount. 

6. The public has in part recognized its responsibility in such mat- 
ters as housing, water supply, foods, drugs, and sanitation. But the 
recognition of responsibility has not been thoroughgoing, and in 
the case of local health officers the tendency has been too frequently 
to provide for the better residential sections and neglect the slums. 

7. The greatest share of responsibility rests upon the individual, 
and under present conditions he is unable to meet it. This inability 
exists by reason of the fact that the majority of wage earners do not 
receive sufficient wages to provide for proper living conditions, and 
because the present methods of disease prevention and cure are ex- 
pensive and sickness is most prevalent among those who are least 
able to purchase health. The worker is expected to provide for 
almost certain contingencies in the future when he lacks means of 
existing adequately in the present. 

8. If we might reasonably expect a rapid increase in the wages of 
all classes of workers to a standard which would permit proper living 
conditions and adequate medical attention, it would perhaps be inad- 
visable to recommend any governmental action. But we feel as- 
sured that no such condition is to be expected in the near future and 
believe that new methods of dealing with the existing evils must 
be adopted. 

9. The remedial measures for existing conditions must be based on 
the cooperative action of those responsible for conditions; must be 
democratic in maintenance, control, and administration; must dis- 
tribute costs practicably and justly; and must provide a powerful 
incentive for sickness prevention. 

10. A system of sickness insurance is the most feasible single meas- 
ure. This conclusion is based on the following: 

(a) The losses occasioned by the wage earner's sickness affect 
employee, employer, and community, all of whom share in the re- 


sponsibility. Insurance is the recognized method of distributing 
loss so as to reduce individual risk to a minimum. 

(b) The strongest of incentives that of lessening cost is given 
to efforts to diminish frequency and seriousness of losses; sickness 
insurance in this respect is a preventive measure of a positive and 
direct kind. The lower the morbidity and mortality rates, the less 
the amount necessary for benefits and the lower the insurance rate. 

(c) Sickness insurance is no longer experimental, but is rapidly 
becoming universal. It is not a novelty even in the United States. 
Although not provided for nor subsidized by Government here, it is 
most widely used, there being several million workers so insured. 

(d) The cost would be no greater than at present. The conclusion 
appears sound that medical benefits and minimum cash benefits of 
$7 per week for a period not exceeding 26 weeks in one year, and 
death benefits of $200, can be provided at a total cost of 50 cents 
per week per insured person. Budgetary studies of large numbers 
of workingmen's families show that under present conditions from 
25 and 50 cents a week up to TO cents and even $1.86 is spent for 
little more than burial insurance. Workers would thus receive im- 
measurably greater benefits for much less than they now pay. 

11. A governmental system of sickness insurance is preferable 

(a) More democratic; the benefits would be regarded as rights, 
not charity. 

(b) Compulsory features, obnoxious under private insurance, 
would be no longer objectionable. 

(c) On account of the reduction in overhead charges and dupli- 
cation, higher efficiency in administration would be secured at less 

(d) Cooperation with other public agencies is impracticable other- 

(e) European experience has proved the superiority of Govern- 
ment systems to private insurance. 

(/) Taxation of industry by Federal Government in sickness- 
insurance system is thoroughly established by the Marine- Hospital 
Service. Law taxing vessels for such fund was passed in 1798, and 
its constitutionality has never been questioned. 

12. The conclusion seems warranted that a sickness-insurance sys- 
tem for the United States or the several States similar in general 
principles and methods to the best European systems will be less diffi- 
cult and radical than has been foreboded. It will not so much intro- 
duce new ideas and practices as it will organize existing plans and 
principles into more effective accomplishment. Existing agencies, 
in. trade-unions, mutual benefit societies, and establishment funds, 
can be utilized just as they have been in Europe. The real problem 
becomes one of constructive organization. 

It is suggested that the commission recommend a Federal system 
of sickness insurance, constructed along the lines here briefly sum- 

1. Membership. The membership shall comprise all employees of 
persons, firms, companies, and corporations engaged in interstate 
commerce, or whose products are transported in interstate commerce, 
or which may do business in two or more States. The employees of 
intrastate establishments to be permitted to be insured, if they so 
elect, under regulations to be prescribed by the commission. 


2. Fund. The fund is to be created by joint contributions by 
employees, employers, and the Government, the last named sufficient 
for expenses of administration. Such contributions should probably 
be in the proportion of 50 per cent from workers, 40 per cent from 
employers, and 10 per cent from the Government. Individuals or 
groups desiring larger benefits may arrange to make larger pay- 
ments, and the rate in any trade, industry, or locality may be reduced 
where conditions so improve as to make a lower rate adequate. The 
contributions are to be secured through taxing each interstate em- 
ployer a certain amount weekly for each employee, the part con- 
tributed by workers to be deducted from their wages, thus using the 
regular revenue machinery of the Government. 

3. Benefits. Benefits to be available for a limited period in the 
form of cash and medical benefits during sickness, nonindustrial 
accidents, and child bearing ; death benefits to be of limited size and 

ayable on presentation of proper evidence. 

4. Administration. The administration of the insurance funds is 
be carried out by a national sickness insurance commission. The 

_ational commission should be composed, by presidential appoint- 
ment with Senate confirmation, of a director (who would be chair- 
man), representatives of employers and representatives of employees 
in equal ratio, and, as ex officio nonvoting members, tlie Federal 
Commissioner of Labor Statistics and the Surgeon General of the 
Public Health Service. The commission should be empowered to 
supervise all funds and determine their character and limits of 
jurisdiction ; promulgate all regulations necessary to enforce the act ; 
establish and maintain hospitals; maintain staffs of medical exam- 
iners, specialists, dentists, and visiting nurses ; provide for medicines 
and appliances; make contracts with local physicians; cooperate 
with local funds and health authorities in disease prevention; and 
provide for collecting actuarial data. 

Correlation of the insurance system with the medical profession, 
the lack of which has been a- serious defect in German and British 
systems, is absolutely necessary. Contracts with physicians should 
allow to each a per capita payment for the insured persons under his 
care, the right of selection of physician to be retained by the insured. 
For the signing of certificates entitling the insured to benefits, and 
for treating the insured in hospitals, the Surgeon General should 
detail physicians from the Public Health Service, their entire time 
to be given to these and other duties (consulting with local physi- 
cians, enforcing Federal laws and regulations, and cooperating with 
local authorities). 


The report dealing with this question has been presented by Com- 
missioner Lennon, and is printed on pages 253-261. 


The investigation of scientific management was conducted by 
Prof. Robert F. Hoxie, with the expert assistance and advice of Mr. 
Robert G. Valentine, representing the employer's interest in manage- 
ment, and Mr. John P. Frey, representing the interests of labor. The 
investigation grew out of public hearings held by the commission 


during the spring of 1914, at which the almost unqualified opposition 
of labor to scientific management was manifested. The purpose of 
the investigation was to test by the results of actual practice the 
claims of scientific management and the charges of the representatives 
of organized labor. 

The investigation, which covered a period of more than a year, 
was made with the greatest care and thoroughness. Thirty-five 
shops and systematizing concerns were examined and interviews 
were had with a large number of scientific management leaders, 
experts, and employers. The shops visited w^ere, almost without 
exception, those designated by authorities on scientific management, 
such as Messrs. Taylor, Gantt, and Emerson, as the best representa- 
tives of the actual results of scientific management. In other words, 
the examination was practically confined to the very best examples 
of scientific management. The defects and shortcomings pointed out 
hereinafter are, therefore, characteristic of the system under the most 
favorable conditions. 

As a result of their investigations, Prof. Hoxie, Mr. Valentine, and 
Mr. Frey submitted a report, agreed upon without exceptions, in 
which the statements and recommendations which follow are em- 
bodied. These statements constitute a very brief summary of the 
entire report, w T hich should be read as a whole if a complete under- 
standing of their results and findings is desired. 

Throughout the report the term " scientific management " is under- 
stood to mean the system devised and applied by Frederick W. 
Taylor, H. L. Gantt, Harrington Emerson and their followers, with 
the object of promoting efficiency in shop management and operation. 

The report, unanimously agreed upon by the commission's inves- 
tigator and his advisory experts, is the basis for the following 


1. As a system, scientific management presents certain possible 
benefits to labor and to society : 

(a) A close casual relation exists between productive efficiency and 
possible wages. Greater efficiency and output make possible higher 
wages in general and better conditions of employment and labor. 

In so far, then, as scientific management affords opportunities for 
lower costs and increased production without adding to the burden 
of the workers in exhaustive effort, long hours, or inferior working 
conditions, it creates the possibility of very real and substantial 
benefits to labor and to society. 

(b) It is the policy of scientific management, as a preliminary to 
strictly labor changes, to bring about improvement and standardiza- 
tion of the material equipment and productive organization of the 
plant, particularly : 

Machinery: Installation, repair, operation. 

Tools: Storage, care, delivery. 

Material equipment : Rearrangement to avoid delays, etc. 

Product: Devices for economical and expeditious handling and 

Processes and methods: Elimination of Avaste motions, improve- 
ment of accessories, etc. 


Reorganization of managerial staff and improvement of managerial 

Reorganization of sales and purchasing departments with a view to 
broadening and stabilizing the market. 

Improvements in methods of storekeeping and regulation of deliv- 
ery, surplus stock, etc. 

All such improvements are to be commended, and investigation 
shows that they are not only accepted by labor without opposition 
but are, in fact, welcomed. 

2. Scientific management in its direct relation to labor is not devoid 
of beneficial aspects, inasmuch as it is to a large extent an attempt at 
immediate standardization of labor conditions and relations. It may 
also serve labor by calling the attention of the employer to the fact 
that there are other and more effective ways to meet severe com- 
petition than by " taking it out of labor." 

It is true that scientific management and organized labor are not 
altogether in harmony in their attitude toward standardization of 
labor conditions and relations. While both seek to have the con- 
ditions of work and pay clearly defined and definitely maintained at 
any given moment, they differ fundamentally as to the circumstances 
which may justly cause the substitution of new standards for old 
ones. Trade-unionism tends to hold to the idea that standards must 
not be changed in any way to the detriment of the workers. Scien- 
tific management, on the other hand, regards changes as justified and 
desirable if they result in increase of efficiency, and has provided 
methods, such as time study, for the constant suggestion of such 

3. The same may be said of many other major claims of scientific 
management. Whether the ideals advocated are attained or at pres- 
ent attainable, and whether scientific managers are to be found who 
purposely violate them, scientific management has in these claims 
and in the methods upon which they are based shown the way along 
which we may proceed to more advantageous economic results for 
labor and for society. It may not have succeeded in establishing a 
practical system of vocational selection and adaptation, but it has 
emphasized the desirability of it; it may not set the task with due 
and scientific allowance for fatigue so that the worker is guarded 
against overspeeding and overexertion, but it has undoubtedly de- 
veloped methods which make it possible to better prevailing condi- 
tions in this respect; it has called attention most forcibly to the evils 
of favoritism and the rough and arbitrary decisions of foremen and 
others in authority. If scientific management be shown to have posi- 
tive objectionable features, from both the standpoint of labor and 
the welfare of society, this constitutes no denial of these beneficial 
features, but calls rather for intelligent social action to eliminate 
that which is detrimental and to supplement and control that which 

beneficial to all. 

is oenen< 


4. Cor 


4. Conditions in actual shops do not conform to the ideals of the 
stem, and show no general uniformity. Actual field investigations 
emonstrated beyond reasonable doubt that scientific management 
practice is characterized by striking incompleteness and manifold 
38819 16 9 


diversity as compared with the theoretical exposition of its advo- 
cates. This incompleteness and diversity in practice apply not only 
to matters of detail but cover many of the essential features of 
scientific management even among those shops designated by Taylor, 
Gantt, and Emerson as representative of their work and influence. 
The following particular defects were observed: 

(a) Failure to carry into effect ^vith any degree of thoroughness 
the general elements involved in the system. This may take the 
form of ignoring either ^the mechanical equipment and managerial 
organization, adopting simply a few routine features, such as time 
study and bonus payment, or the adoption of all mechanical features 
with a complete disregard of the spirit in which they are supposed 
to be applied. 

(5) Failure to adopt the full system of "functional foreman- 
ship" The results of prevailing practices do not support the claim 
that scientific management treats each workman as an independent 
personality and that it substitutes joint obedience to fact and law for 
obedience to personal authority. 

(c) Lack of uniformity in the method of selecting and hiring 
help. Upon the whole the range of excellence in methods of selec- 
tion and hiring in " scientific " shops was the same as in other shops. 
The workers in scientific-management shops seem to be a select class 
when compared with the same classes of workers outside, but this 
result seems to be due to the weeding out of the less satisfactory 
material rather than to initial methods of selection. 

(d) Failure to substantiate claims of scientific management with 
reference to the adaptation, instruction, and training of workers. 
Scientific-management shops in general depend upon nothing in the 
way of occupational adaptation of the workers except the ordinary 
trial and error method. Investigation reveals little to substantiate the 
sweeping claims of scientific managers made in this connection, except 
that in the better scientific-management shops many workmen are 
receiving more careful instruction and a higher degree of training 
than is at present possible for them elsewhere. The most that can 
be said is that scientific management, as such, furthers a tendency 
to narrow the scope of the workers' industrial activity, and that it 
falls far short of a compensatory equivalent in its ideals and actual 
methods of instruction and training. 

e) Lack of scientific accuracy, uniformity, and justice in time 
study and task setting. Far from being the invariable and purely 
objective matters that they are pictured, the methods and results of 
time study and task setting are in practice the special sport of indi- 
vidual judgment and opinion, subject to all the possibilities of diver- 
sity, inaccuracy, and injustice that arise from human ignorance and 

The objects of time study are: (1) Improvement and standardiza- 
tion of the methods of doing the work, without reference to a stand- 
ard time for its accomplishment, and (2) fixing of a definite task 
time of efficiency scale. 

Possibilities of great advantage exist in the use of time study for 
the first purpose. However, in a large number of shops, time study 
for this purpose is practically neglected. 

In connection with the second purpose, setting of task time or 
efficiency scale, great variations are noted, and especially the part 



which fallible individual judgment and individual prejudice may 
and do play. 

Detailed observations of the practice of making time studies and 
setting tasks showed great variations in methods and results. Seven- 
teen separate sources of variation are pointed out, any one of which 
is sufficient to and in practice does greatly influence the results of 
time studies. 

In face of such evidence it is obviously absurd to talk of time study 
as an accurate scientific method in practice or of the tasks set by 
means of it as objective scientific facts which are not possible or 
proper subjects of dispute and bargaining. 

Furthermore, the time-study men upon whom the entire results 
depend were found to be prevailingly of the narrow-minded mechani- 
cal type, poorly paid, and occupying the lowest positions in the man- 
agerial organization, if they could be said to belong at all to the 
managerial group. Nor does the situation seem to promise much im- 
rovement, for the position and pay accorded to time-study men 

nerally are such as to preclude the drawing into this work of 
really competent men in the broader sense. Aside from a few 
notable exceptions in the shops and some men who make a general 
profession of time study in connection with the installation of scien- 
tific management, this theoretically important functionary, as a rule, 
receives little more than good mechanic's wages and has little voice 
in determining shop policies. In fact, the time-study man, who, if 
scientific management is to make good the most important of its 
labor claims, should be among the most highly trained and influential 
officials in the shop, a scientist in viewpoint, a wise arbitrator be- 
tween employer and workman, is in general a petty functionary, a 
specialist workman, a sort of clerk who has no voice in the counsels 
of the higher officials. 

However, the method of time study is not necessarily impracticable 
or unjust to the workers. Under proper direction time study prom- 
ises much more equitable results than can be secured by the ordinary 
methods. The greatest essential is a time-study man of exceptional 
knowledge, judgment, and tact. The average time-study man does 
not fulfill these requirements at present. 

Finally, it is only in connection with standard products, requiring 
only moderate skill and judgment in layout and work, that economy 
seems to allow adequate application of the time-study method. Its 
natural sphere seems to be routine and repetitive work. As long as 
industry continues to be as complex and diversified as it is, this ele- 
ment of economy will without doubt continue to operate in a way 
to limit the legitimate scope of time study and task setting. Task 
setting as at present conducted is not satisfactory to workmen and 
creates dissatisfaction and jealousy. 

(f) ^Failure to substantiate the claim of having established a 
scientific and equitable method of determining wage rates. In 
analyzing the wage-fixing problem in connection with scientific 
management two matters are considered: (1) The "base rate, 5 ' some- 
times called the day wage, which constitutes for any group of work- 
ers the minimum earnings or indicates the general wage level for 
that group, and (2) added "efficiency payments," which are sup- 
posed to represent special additional rewards for special attainments. 


^ investigators sought in vain for any scientific methods de- 

vised or employed by scientific management for the determination 
of the base rate, either as a matter of justice between the conflicting 
claims of capital and labor, or between the relative claims of in- 
dividuals and occupational groups. 

Kates for women with reference to men are, as a rule, on the same 
basis in scientific-management shops as in other shops. One leader 
said, "There is to be no nonsense about scientific management. If 
by better organization and administration what is now regarded as 
man's work can be done by women, women will be employed and 
women's wages will be paid." 

Scientific-management shops seem as ready as others to raise the 
rates as the wage level generally advances. 

" Bewildering diversity " prevails in relation to the " efficiency 
payment" or reward for special effort. After a careful and ex- 
tended analysis and investigation of the different ways of reward- 
ing individual increases in output, it was concluded: 

All of these systems definitely belie the claim that scientific man- 
agement pays workers in proportion to their efficiency. One of them 
has the obvious intent of weeding out the lower grade of workers, 
while the other two are so constituted as to make such workers very 
unprofitable to the employers. Two of them, lend themselves easily to 
the exploitation of mediocre workers those who can deliver a medium 
output but can not attain to a standard task set high. All of them 
furnish a strong stimulus to high efficiency and output, but in them- 
selves furnish no visible check on overspeeding and exhaustion. All 
of them are capable of being liberally applied, but all can also be used 
as instruments of oppression through the undue severity of task set- 
ting or efficiency rating. 

There can be no doubt that under scientific management rates are 
cut. But to say positively that scientific management, on the whole, 
furthers the cutting of rates is quite another matter. The fact seems 
clear that at this point there is a conflict of tendencies within the thing 
itself. There is a strong inducement for scientific managers to main- 
tain rates strictly, and the honest efforts of those who deserve the 
name to so maintain them can hardly be impugned. At the sanio 
time, however, the greatest advance toward efficiency, for which 
scientific management stands, is obtained by the constant alteration 
of conditions and tasks through time study. Such alterations almost 
of necessity mean constant rate cutting. Were industry once stand- 
ardized for good and all, scientific management would undoubtedly 
operate as an unequivocal force tending to the maintenance of rates. 
As it is with industry in flux, what amounts to rate cutting seems to 
be almost of necessity an essential part of its very nature. 

Finally, all of the systems of payment tend to center the attention 
of the worker on his individual interest and gain and to repress the 
development of group consciousness and interest. Where the work 
of one man is independent of another, the individual has no motive 
to consider his fellow, since his work and pay in no wise depend on 
the other man. What either does will not affect the other's task or 
rates. Where work is independent, the leader can not afford to slow 
down to accommodate his successor. 

It must be admitted that these systems are admirably suited to 
stimulate the workers, but in so far as there may be virtue in the 



union principles of group solidarity and uniformity, and in so far 
as they lay claim to scientific accuracy or a special conformity to 
justice in reward, they must be judged adversely. 

(g) Failure to protect the workers from overexertion and exhaus- 
tion. It is claimed by scientific management that protection to 
orkers is afforded by such devices as: Standardization of equip- 
ient and performance ; substitution of exact knowledge of men and 
f machines for guesswork in the setting of the task and the deter- 
mination of -the hours and other conditions of work ; careful studies 
of fatigue; elimination of the need for pace setters; transformation 
of speeders into instructors, and transfer of responsibility from the 
workers to the management for contriving the best methods of work ; 
maintenance of the best conditions for performing work through fur- 
nishing the best tools and materials at the proper time and place; 
instruction of the w r orkers in the most economical and easiest methods 
of performing operations; institution of rational rest periods and 
modes of recreation during working hours; and surrounding the 
workers with the safest and most sanitary shop conditions. 

Investigation indicates that scientific management, in practice, fur- 
nishes no reasonable basis for the majority of these specific claims 
in the present, and little hope for their realization in the near future. 
In these matters, indeed, the utmost variation prevails in scientific 
management as in other shops. Several admirable cases were found 
with respect to all these matters, but shops were not wanting where 
the management exhibited the utmost suspicion of the workers, refer- 
ring continually to their disposition to "beat the time-study man," 
although the time study in such shops was obviously based on the 
work of speeders and all sorts of inducements were offered for pace 
setting, where instruction and training of the workers w^ere empha- 
sized by their absence, and where the general conditions of the work 
w^ere much in need of improvement. 

The investigation seems to show clearly that practical scientific 
management has not materially affected the length of the working 
day. Aside from shops where the management was evidently imbued 
with a strong moral sense, the hours of; labor in these shops were 
those common to the industry and the locality. 

When we come to the matter of fatigue studies and their connec- 
tion with speeding and exhaustion, the claims of scientific manage- 
ment seem to break down completely. No actual fatigue studies 
were found taking place in the shops, and the time-study men, who 
should be charged with such studies, seemed in general to be quite 
indifferent or quite ignorant in regard to this whole matter. This 
does not mean that no attention to fatigue is given in scientific man- 
agement shops. Cases were found where the health and energy of 
the workers w T ere carefully observed and attempts were made to 
adopt the work to their condition, but the methods employed were 
the rough-and-ready ones of common-sense observation. Best periods 
and modes of recreation during the working hours are a regular 
institution on an extended scale in but one shop visited by the inves- 
tigators. Isolated instances were encountered elsewhere, but man- 
agers in general apparently do not even entertain the idea of their 

Scientific management does not always surround the workers with 
the safest and most sanitary shop conditions. In general, scientific 


management shops seem to be good shops as shops go. The introduc- 
tion of the system has the tendency without doubt to clean the shop 
up and to improve the condition of belting, machinery, and arrange- 
ment of material equipment generally. All this is in the direct 
line of efficiency and safety. Several very notable examples of 
excellence in safety and sanitation were found. On the other hand, 
several shops visited were below good standards in these respects, 
and flagrant specific violations of safety rules were encountered. 

As a w r hole, the facts in nowise justify the assumption that scien- 
tific management offers any effective guaranty against overspeeding 
and exhaustion of workers. The investigation left a strong impres- 
sion that scientific management workers in general are not over- 
speeded, but the challenge to show any overspeeded or overworked 
men in scientific management shops in very easily met. The situa- 
tion in this respect varies much wdth the industry. Some instances 
of undoubted overspeeding were found, particularly in the case of 
girls and women. But these instances do not warrant a general 
charge. On the other hand, there appears to be nothing in the special 
methods of scientific management to prevent speeding up where the 
technical conditions make it possible and profitable, and there is 
much in these methods to induce it in the hands of unscrupulous 

(A) Failure to substantiate the claim that scientific management 
offers exceptional opportunities for advancement and promotion on 
a basis of individual merit. While scientific management undoubt- 
edly separates the efficient from the inefficient more surely and 
speedily than ordinary methods, it was shown by the investigation 
that scientific management often fails in the development of func- 
tional foremanship and in the elimination of favoritism. It tends 
to create a multitude of new tasks on which less skill is required and 
lower rates can be paid. It has developed no efficient system for the 
placing or adaptation of the workers. It is inclined in practice to 
regard a worker as adapted to his work and rightly placed when he 
succeeds in making the task. It tends to confine the mass of work- 
men to one or two tasks, and offers little opportunity, therefore, for 
the discovery and development of special aptitudes among the masses. 
It tends to divide the workers into two unequal classes the few 
who rise to managerial positions and the many who seem bound to 
remain task workers within a narrow field. In the ideal it offers 
opportunity for promotion from the ranks, and this works out to a 
certain extent in practice, but not universally. 

There is a great deal of exaggeration, too, in statements made con- 
cerning special rewards for usable suggestions. Few of the shops 
make any systematic rewards of this kind, and where this is the case 
the rewards are usually trivial. In one shop the investigator was 
shown an automatic machine invented by a workman, which did the 
work of several hand workers. "Did he receive a reward? " was 
asked. " Oh, yes," came the answer, " his rate of pay was increased 
from 17 to 22 cents per hour." 

(i) With reference to the alleged methods and severity of dis- 
cipline under scientific management the " acrimonious criticism " 
from trade unions does not seem to be warranted. In theory, the 
scientific managers appear to have the best of the argument, and in 


practice the investigation showed an agreeable absence of rough 
and arbitrary disciplinary authority. When the tasks were liberally 
set, the workers were found generally operating without special 
supervision except where instructions or assistance were needed. 
Deductions were indeed made for poor work and destruction of ma- 
terials, but in the better class of shops apparently with no greater 
and perhaps with less than ordinary severity. 

While it should be remembered that the shops selected represented 
probably the best of the shops operating under this system, in gen- 
eral, it would seem that scientific management does lessen the rigors 
of discipline as compared with other shops where the management is 
autocratic and the workers have no organization, 

(/') Failure to substantiate the claim that workers are discharged 
only on just grounds and have an effective appeal to the highest 
managerial authority. This whole matter is one in which neither 
management claims nor union complaints seem susceptible of proof, 
but the investigation indicates that the unions have legitimate basis 
for charging that discharge is generally a matter of arbitrary 
managerial authority. 

(k) Lack of democracy under scientific management. As a result 
of the investigation, there can be little doubt that scientific manage- 
ment tends in practice to weaken the power of the individual worker 
as against the employer, setting aside all questions of personal atti- 
tude and the particular opportunities and methods for voicing com- 
plaints and enforcing demands. It gathers up and transfers to the 
management the traditional craft knowledge and^ transmits this 
again to the workers only piecemeal as it is needed in the perform- 
ance of the particular job or task. It tends in practice to confine 
each worker to a particular task or small cycle of tasks. It thus 
narrows his outlook and skill to the experience and training which 
are necessary to do the work. He is therefore easier of displacement. 
Moreover, the changing of methods and conditions of work and the 
setting of tasks by time study with its assumption always of scientific 
accuracy puts the individual worker at a, disadvantage in any attempt 
to question the justice of the demands made upon him. The onus 
of proof is upon him and the standards of judgment are set up by 
the employer, covered by the mantle of scientific accuracy. 

It would seem also that scientific management tends, on the whole, 
to prevent the formation of groups of workers within the shop with 
recognized common interests, and to weaken the solidarity of those 
which exist. Almost everything points to the strengthening of the 
individualistic motive and the weakening of group solidarity. Each 
worker is bent on the attainment of his individual task. He can not 
combine with his fellows to determine how much that task shall be, 
If the individual slows down he merely lessens his wages and preju- 
dices his standing without helping his neighbor. If he can beat 
the other fellow, he helps himself without directly affecting the 
other's task or pay. Assistance, unless the man is a paid instructor, 
is at personal cost. Special rewards, where offered, are for the indi- 
vidual. Rules of seniority are not recognized. Sometimes personal 
rivalry is stimulated by the posting of individual records or classifi- 
cation of the workers by name into " excellent," " good," " poor," etc. 
Potential groups are broken up by the constant changes in methods 
and reclassification of workers which are the mission of time study. 


The whole gospel of scientific management to the worker is to the 
individual, telling him how, by special efficiency, he can cut loose 
from the mass, and rise in wages or position. 

With the power of the individual weakened and the chances 
lessened for the development of groups and group solidarity, the 
democratic possibility of scientific management, barring the presence 
of unionism, would seem to be scant. The individual is manifestly in 
no position to cope with the employer on a basis of equality. The 
claim to democracy based on the close association of the management 
and the men and the opportunities allowed for the voicing of com- 
plaints is not borne out by the facts ; and in the general run of scien- 
tific-management shops, barring the presence of unionism and col- 
lective bargaining, the unionists are justified in the charge that the 
workers have no real voice in hiring and discharging, the setting of 
the task, the determination of the wage rates, or the general condi- 
tions of employment. This charge is true even where the employers 
have no special autocratic tendencies, much more so therefore where, 
as in many cases, they are thoroughly imbued with the autocratic 
spirit. With rare exceptions, then, democracy under scientific man- 
agement can not and does not exist apart from unionism and collec- 
tive bargaining. 

Does the scientific manager, as a matter of fact, welcome the coop- 
eration of unionism? Here, again, the facts should decide the con- 
tention. The fact is that while in numbers of scientific-management 
shops some unionists are employed, they are not generally employed 
as union men, and the union is rarely recognized and dealt with as 
such. The fact is that those who declare the willingness of scientific 
management to welcome the cooperation of unionism in general either 
know nothing about unionism and its rules and regulations or 
are thinking of a different kind of unionism from that to which the 
American Federation of Labor stands committed and a kind of co- 
operation foreign to its ideals and practices. 

To sum up, scientific management in practice generally tends to 
weaken the competitive power of the individual worker and thwarts 
the formation of shop groups and weakens group solidarity; more- 
over, generally scientific management is lacking in the arrangements 
and machinery necessary for the actual voicing of the workers' ideas 
and complaints and for the democratic consideration and adjustment 
of grievances. Collective bargaining has ordinarily no place in the 
determination of matters vital to the workers, and the attitude 
toward it is usually tolerant only when it is not understood. Finally 
unionism, where it means a vigorous attempt to enforce the viewpoint 
and claims of the workers, is in general looked upon with abhorrence, 
and unions which are looked upon with complacency are not the 
kind which organized labor in general wants, while the union cooper- 
ation which is invited is altogether different from that which they 
stand ready to give. In practice scientific management must, there- 
fore be declared autocratic in tendency a reversion to industrial 
autocracy, which forces the workers to depend on the employers' con- 
ception of fairness and limits the democratic safeguards of the 

5. Scientific management is still in its infancy or early trial stages, 
and immaturity and failure to attain ideals in practice are necessary 
accompaniments to the development of any new industrial or social 


movement. Doubtless many of its diversities and shortcomings will, 
therefore, be cured by time. 

Before this can be brought about, however, certain potent causes of 
resent evil must be eradicated: 

(a) The first of these is a persistent attempt on the part of experts 
nd managers to apply scientific management and its methods outside 
their natural sphere. 

(&) A second chief source of danger and evil to labor in the 
application of scientific management is that it offers its wares in the 

en market, but it has developed no means by which it can control 
, use of these by the purchaser. In large part the practical de- 
.arture of scientific management from its ideals is^ the result of 
pecial managerial or proprietorial aims and impatience of delay 
n their fulfillment. The expert is frequently called in because the 
.stablishment is in financial or industrial straits, and the chief con- 
cern of the management is quick increase of production and profits. 
It must meet its competitors here and now, and can not afford to 
expend more than is necessary to do this, or to forego immediate 
returns while the foundations are being laid for a larger but later 
success, and with careful regard to immediate justice and the long- 
time welfare of its working force. The outcome frequently is con- 
flict between the systematizer and the management, resulting in the 
abandonment of the scheme only partially worked out on the retire- 
ment of the expert, leaving the management to apply crudely the 
methods partially installed, sometimes to the detriment of the work- 
ers and their interests. 

It is true that the situation thus outlined is not of universal appli- 
cation. But bitter complaints were frequently heard from members 
of the small ^roup of experts who represent the highest ideals and 
intelligence of the movement, in regard to the managerial opposition 
which they have encountered, and frequent apologies were offered 
for the conditions and results of their work, accompanied by the 
statement that they could go no further than the management would 
allow, or that things had been done by the management against their 
judgment and for which they could not stand. Moreover, scientific 
management is closely interlocked with the mechanism of production 
for profit and the law of economy rules. Many things which would 
be desirable from the ideal standpoint, and which are a practical 
necessity if the interests of the workers are to be fully protected, 
are not always or usually economical. This is specially true of time 
study, task setting, and rate making. 

The arbitrary will of the employer and the law of economy are 
two potent special forces which contribute to the existing diversity, 
incompleteness, and crudity of scientific management as it is prac- 
ticed, even where the systematizer is possessed of the highest intelli- 
gence and imbued with the best motives of his group. 

(<?) But to explain the situation as it exists at present, two other 
important factors must be taken into consideration. The first of 
these is the existence and practice of self-styled scientific management 
systematizers and time study experts who lack in most respects the 
ideals and the training essential to fit them for the work which they 
claim to be able to do. Scientific management as a movement is 
cursed with fakirs. The great rewards which a few leaders in the 
movement have secured for their services have brought into the field 


a crowd of industrial " patent medicine men." The way is open to 
all. No standards or requirements, private or public, have been 
developed by the application of which the goats can be separated 
from the sheep. Employers have thus far proved credulous. Almost 
anyone can show the average manufacturing concern where it can 
make some improvements in its methods. So the scientific manage- 
ment shingles have gone up all over the country, the fakirs have gone 
into the shops, and in the name of scientific management have reaped 
temporary gains to the detriment of both the employers and the 

(d) Fake scientific management experts, however, are not alone 
responsible for the lack of training and intelligence which contributes 
to the diversity and immaturity of scientific management in practice 
and its failure to make good the labor claims of its most distinguished 
leaders. The fact is that on the whole, and barring some notable 
exceptions, the sponsors and adherents of scientific management 
experts and employers alike are profundly ignorant of very much 
that concerns the broader humanitarian and social problems which 
it creates and involves, especially as these touch the character and 
welfare of labor. 

It is because of this ignorance and unwarranted assurance that 
there is a strong tendency on the part of scientific management 
experts to look upon the labor end of their work as the least difficult 
and requiring the least careful consideration. To their minds the 
delicate and difficult part of the task of installation is the solution 
of the material, mechanical, and organic problems involved. They 
tend to look upon the labor end of their work as a simple technical 
matter of so setting tasks and making rates that the workers will 
give the fullest productive cooperation. They tend naively to assume 
that when the productivity of the concern is increased and the la- 
borers are induced to do their full part toward this end, the labor 
problem in connection with scientific management is satisfactorily 
solved. In short, in the majority of cases the labor problem appears 
to be looked at as one aspect of the general problem of production 
in the shop, and it is truthfully assumed that if it is solved with 
reference to this problem it must also be solved with due regard 
to labor's well-being and its just demands. This seems to have 
been the characteristic attitude of scientific management from the 
beginning. Labor was simply looked upon as one of the factors 
entering into production, like machinery, tools, stores, and other 
elements of equipment. The problem was simply how to secure an 
efficient coordination and functioning of these elements. It was 
only after the opposition of labor had been expressed that scientific 
management began to be conscious of any other aspect of the labor 
matter. And with some notable exceptions scientific management ex- 
perts and employers still look upon the labor matter almost solely 
as an aspect of the general production problem, and have little posi- 
tive interest or concern in regard to it otherwise. 

It is probable that scientific managers will object to these state- 
ments, pleading that they are mainly variations and conditions due 
to the time element or to the necessity imposed by the law of costs. 
They will say, for example, that when a new and unusual job comes 
in, neither time nor economy will allow of careful time studies, and 
if careful studies were made of all the variations of a complicated 




task, the expense of such studies would wipe out the profit; that, in 
general, they are proceeding toward the full realization of the ideal 
of scientific management as fast as economy will allow. But such 
pleas would serve only to confirm the main contention that scientific 
managers and scientific management employers generally are neces- 
sarily ruled, like all members of the employing group, by the forces 
of cost and profits; that to them the labor problem is primarily an 
aspect of the problem of production, and that in the ends the needs 
and welfare of labor must be subordinated to these things. Beneath 
all other causes or shortcomings of scientific management, therefore, 
in its relation to labor, there seems 1 to be the practical fact of an 
opposition of interests between the profit-taking and the labor group, 
which makes extremely doubtful the possibility that its shortcomings 
from the standpoint of labor are capable of elimination. 


6. (a) Scientific management at its best furthers the modern ten- 
dency toward the specialization of the workers. Its most essential 
features functional foremanship, time study, task setting, and effi- 
ciency payment all have this inherent effect. 

Under the scientific management system fully developed, the ordi- 
nary mechanic is intended to be and is, in fact, a machine feeder and 
a machine feeder only, with the possibility of auxiliary operations 
clearly cut off and with means applied to discourage experimentation. 
And what applies to the machine feeder applies with more or less 
thoroughness to machine and hand operatives generally. 

But it is not merely in stripping from the job its auxiliary opera- 
tions that scientific management tends to specialize the work and the 
workmen. Time study, the chief cornerstone of all systems of 
scientific management, tends inherently to the narrowing of the job 
or task itself. As the final object of time study, so far as it directly 
touches the workers, is to make possible the setting of tasks so simple 
and uniform and so free from possible causes of interruption and 
variation that definite and invariable time limits can be placed upon 
them, and that the worker may be unimpeded in his efficient per- 
formance of them by the necessity for questioning and deliberation, 
the preponderating tendency of time study is to split up the work 
into smaller and simpler operations and tasks. Decidedly, then, 
time study tends to further the modern tendency toward specializa- 
tion of the job and the task. 

With functional foremanship lopping off from the job auxiliary 
operations, and time study tending to a narrowing of the task itself, 
task setting and efficiency methods of payment come into play as 
forces tending to confine the worker to a single task or a narrow 
range of operations. The worker is put upon the special task for 
which he seems best adapted, and he is stimulated by the methods of 
payment employed to make himself as proficient as possible at it. 
When he succeeds in this, to shift him to another task ordinarily in- 
volves an immediate and distinct loss to the employer, and the worker 
himself naturally resents being shifted to a new task since this in- 
volves an immediate loss in his earnings. Here worker and em- 
ployer are as one in their immediate interest to have the job so 


simple that the operation can be quickly learned, and the task made, 
and, that shifting of tasks be eliminated as far as possible. The 
employer besides has another motive for this, in that the shifting of 
the workers multiplies the records and renders more complex the 
system of wage accounting. It is true that the scientific manage- 
ment employer, like any other, must have a certain number of workers 
in the shop who are capable of performing a plurality of tasks. But 
the tendency is to have as few all-round workers as are necessary to 
meet these emergencies. The methods of scientific management 
operate most effectively when they break up and narrow the work of 
the individual, and 'the ends of scientific management are best served 
when the rank and file of the workers are specialists. 

This inherent tendency of scientific management to specialization 
is buttressed, broadened in its scope and perpetuated by the pro- 
gressive gathering up and systematizing in the hands of the employ- 
ers of all the traditional craft knowledge in the possession of the 
workers. With this information in hand and functional foreman- 
ship to direct its use, scientific management claims to have no need 
of craftsmen, in the old sense of the term, and, therefore, no need for 
an apprenticeship system except for the training of functional fore- 
men. It therefore tends to neglect apprenticeship except for the 
training of the few. And as this body of systematized knowledge in 
the hands of the employer grows, it is enabled to broaden the scope 
of its operation, to attack and specialize new operations, new crafts 
and new industries, so that the tendency is to reduce more and more 
to simple, specialized operations, and more and more workers to the 
positions of narrow specialists. Nor does scientific management 
afford anything in itself to check or offset this specialization ten- 
dency. The instruction and training offered is for specialist work- 
men. Selection and adaptation are specializing in their tendencies. 
Promotion is for the relatively few. The whole system, in its con- 
ception and operation, is pointed toward a universally specialized 
industrial regime. 

(&) But scientific management is not only inherently specializing; 
it also tends to break down existing standards and uniformities set 
up by the workmen, and to prevent the establishment of stable con- 
ditions of work and pay. Time study means constant and endless 
change in the method of operation. No sooner is a new and better 
method discovered and established and the condition of work and 
pay adapted to it than an improvement is discovered involving per- 
haps new machinery, new tools and materials, a new way of doing 
things, and a consequent alteration of the essential conditions of 
work and pay, and perhaps a reclassification of the workers. 

(c) Ample evidence to support this analysis was afforded by the 
investigation. Where the system was found relatively completely 
applied, the mass of the workers were engaged in specialized tasks, 
there was little variation in the operations except in emergencies, 
apprenticeship for the many was abandoned or was looked upon as 
an investment which brought no adequate returns and was slated 
for abandonment; almost everywhere scientific management em- 
ployers expressed a strong preference for specialist workmen, old 
crafts w r ere being broken up and the craftsmen given the choice of 
retirement or of entering the ranks of specialized workmen; in the 
most progressive shops, the time study men were preparing the way 


__r a broader application of the system by the analytical study of 
the operations and crafts not yet systematized. Changes in methods 
and classification of workers were seen even during the short course 
of the investigation. 

(d) What does this mean from the standpoint of labor and labor 
elf are ? Certain conclusions are inevitable. Scientific management, 

fully and properly applied, inevitably tends to the constant break- 
down of the established crafts and craftsmanship and the constant 
elimination of skill in the sense of narrowing craft knowledge and 
workmanship except for the lower orders of workmen. Some scien- 
tific management employers have asserted belief in their ability to 
get on a paying basis within three months, should they lose their 
whole working force except the managerial staff and enough others 
> maintain the organization, if they had to begin all over again 
"th green hands. What this means in increased competition of 
rkmen with workmen can be imagined. Were the scientific man- 
ment ideal fully realized, any man who walks the street would be 
a practical competitor for almost any workman's job. 

Such a situation would inevitably break clown the basis of present- 
day unionism and render collective bargaining impossible in any ef- 
fective sense in regard to the matters considered by the unions most 
essential. It has been proved by experience that unskilled workers 
generally find it most difficult to maintain effective and continuous 
organization for dealing with complicated industrial situations. Ef- 
fective collective bargaining can not exist without effective organi- 
zation. Moreover, we have already seen how scientific management, 
apart from the matter of skill, tends to prevent the formation and 

Jeakens the solidarity of groups within the shops. 
But, beyond all this, time study strikes at the heart and core of the 
principles and conditions which make effective unionism and collec- 
tive bargaining possible with respect to certain most essential mat- 
ters. When the employer can constantly initiate new methods and 
conditions and reclassify the work and the workmen, he can evade 
all efforts of the union to establish and maintain definite and con- 
tinuous standards of work and pay. Time study is in definite oppo- 
sition to uniformity and stable classification. It enables the employer 
constantly to lop off portions of the work from a certain class and 
then to create new classifications of workers, with new conditions of 
work and pay. Add to all of -this the advantage gained by the em- 
ployers in the progressive gathering up and systematization of craft 
knowledge for their own uses, and the destruction of apprenticeship, 
which cuts the workers off from the perpetuation among them of 
craftsmanship, and the destructive tendencies of ^ scientific^ manage- 
ment as far. as present-day unionism and collective bargaining are 
concerned, seems inevitable. 

(e) Under these circumstances the progressive degeneration of 
craftsmanship and the progressive degradation of skilled craftsmen 
also seems inevitable. 

(/) The ultimate effects of scientific management, should it be- 
come universal, upon wages, employment, and industrial peace, are 
matters of pure speculation. During the period of transition, how- 
ever, there can be little doubt of the results. The tendency will be 
first toward a realignment of wage rates. The craftsmen, the highly 
trained workers, can not hope to maintain their wage advantage over 


the semiskilled and less skilled workers. There will be a leveling 
tendency. Whether this leveling will be up or down, it is impossible 
to say. At present scientific management seems to be making the 
relatively unskilled more efficient than ever before, and they are in 
general receiving under it greater earnings than ever before. It is 
evident, however, that the native efficiency of the working class must 
suffer from the neglect of apprenticeship. Scientific managers have 
themselves complained bitterly of the poor material from which they 
must recruit their workers, compared with the efficient and self- 
respecting craftsman who applied for employment 20 years ago. 

Moreover, it must not be overlooked that the whole scheme of 
scientific management, and especially the gathering up and systema- 
tizing of the knowledge formerly the possession of the workmen, 
tends enormously to add to the strength of capitalism. This fact, 
together with the greater ease of displacement shown above, must 
make the security and continuity of employment inherently more 

If generally increased efficiency is the result of scientific manage- 
ment, unemployment w^ould in the end seem to become less of a 
menace. But during the period of transition its increase should be 
expected. Not only must the old craftsmen suffer as the result of 
the destruction of their crafts, but until scientific management finds 
itself able to control markets its increased efficiency must result in 
gluts in special lines, with resulting unemployment in particular 
trades and occupations. A leading scientific-management expert 
has stated that one shop of six in a certain industry systematized by 
him could turn out all the product that the market would carry. 
The result to the workers, if the statement be true, needs no explana- 
tion. Scientific management would seem to offer possibilities ulti- 
mately of better market control or better adaptation to market condi- 
tions, but the experience of the past year of depression indicates that 
at present no such possibilities generally exist. 

Finally, until unionism as it exists has been done away with or 
has undergone essential modification, scientific management can not 
be said to make for the avoidance of strikes and the establishment 
of industrial peace. The investigation, has shown several well-authen- 
ticated cases of strikes which have occurred in scientific-management 
shops. They are perhaps less frequent in this class of shop than 
elsewhere in similar establishments, owing largely to the fact that 
organized workmen are on the whole little employed. In its exten- 
sion, however, it is certain that scientific management is a constant 
menace to industrial peace. So long as present-day unionism exists 
and unionists continue to believe, as they seem warranted in doing, 
that scientific management means the destruction of their organiza- 
tions or their present rules and regulations, unionism will continue 
to oppose it energetically and whenever and wherever opportunity 

It has been said with much truth that scientific management is 
like the invention of machinery in its effect upon workers and social 
conditions and welfare generally that it gives a new impulse to 
the industrial revolution which characterized the latter part of the 
eighteenth and nineteenth centuries and strengthens its general 
effects and tendencies. A chief characterization of this revolution 
has been the breakdown of craftsmanship, the destruction of crafts, 


and the carrying of the modern industrial world toward an era of 
specialized workmanship and generally semiskilled or unskilled 
workmen. Scientific management seems to be another force urging 
us forward toward this era. 


1\ Our industries should adopt all methods which replace inac- 
acy with accurate knowledge and which systematically operate to 
ninate economic waste. Scientific management at its best has suc- 
ded in creating an organic whole of the several departments of 
institution, establishing a coordination of their functions which 
lias previously been impossible, and, in this respect, it has conferred 
great benefits on industry. 

The social problem created by scientific management, however, 
does not lie in this field. As regards its social consequences neither 
organized nor unorganized labor finds in scientific management any 
adequate protection to its standards of living, any progressive means 
for industrial education, any opportunity for industrial democracy 
by which labor may create for itself a progressively efficient share 
in management. Therefore, as unorganized labor is totally un- 
equipped to work for these human rights, it becomes doubly the duty 
of organized labor to work unceasingly and unswervingly for them, 
and, if necessary, to combat an industrial development which not only 
does not contain conditions favorable to" their growth, but, in many 
respects, is hostile soil. 


The evidence which has come before the commission is the basis 
for the following statements : 

1. The practice of using convicts in penitentiaries and prisons 
generally for the manufacture of articles for general commerce has 
been productive of evil results as regards not only the convicts but 
the general public. 

2. The competition of prison-made articles has resulted in the 
existence of a low wage scale in many industries and has subjected 
the manufacturers to a kind of competition which should not exist 
in any civilized community. 

3. The only beneficiaries of the convict labor system are the con- 
tractors who are permitted by the State to exploit the inmates of 

4. The individual States are powerless to deal adequately with 
this situation because of the interstate shipment of convict-made 

It is suggested that the commission recommend : 

1. The abolition as far as possible of indoor manufacture, and the 
substitution of such outdoor work as that upon State farms and 
State roads, providing that where prisoners are employed they 
should be compensated and that the products which they manufac- 
ture should not be sold in competition with the products of free 

2. The enactment by Congress of a bill providing that all convict- 
made goods when transported into any State or Territory of the 
United States shall be subject to the operation of the laws of such 


State or Territory to the same extent and in the same manner as 
though such goods had been produced therein. 


The evidence presented to the commission is the basis for the fol- 
lowing statements : 

1. The immigration policy of the United States has created a 
number of our most difficult and serious industrial problems and has 
been responsible in a considerable measure for the existing state of 
industrial unrest. 

2. The enormous influx of immigrants during the past 25 years 
has already undermined the American standard of living for all 
workmen except those in the skilled trades, and has been the largest 
single factor in preventing the wage scale from rising as rapidly as 
food prices. 

3. The great mass of non-English-speaking workers, who form 
about one-half of the labor force in the basic industries, has done 
much to prevent the development of better relations between em- 
ployers and employees. 

4. The presence of such a large proportion of immigrants has 
greatly hampered the formation of trade-unions and has tremen- 
dously increased the problem of securing effective and responsible 

5. The unreasonable prejudice of almost every class of Americans 
toward the immigrants, who form such a large proportion of the 
labor force of our industries, has been largely responsible for the 
failure of our Nation to reach a correct understanding of the labor 
problem and has promoted the harshness and brutality which has so 
often been manifested in connection with industrial disturbances. 
It has been and to a large measure still is felt possible to dismiss the 
most revolting working conditions, the most brutal treatment, or 
the most criminal invasions of personal rights, by saying, " Oh, well, 
they are just ignorant foreigners." 

6. If immigration had continued at the average rate of the past 
10 years it would have proved almost, if not quite, impossible to have 
brought industrial conditions and relations to any proper basis, in 
spite of the most extreme efforts of civic organizations, trades-unions, 
and governmental machinery. The great diminution of immigration 
as a result of the European war has already begun to show its 
salutary effects. 

It is suggested that the commission recommend : 

1. The enactment of legislation providing for the restriction of im- 
migration based upon the general provisions contained in the so- 
called Burnett-Dillingham bill, which has received the approval of 
two successive Congresses. With a full realization of the many 
theoretical objections which have been urged against the literacy 
test, the consensus of evidence is so strong that its practical work- 
ings would be to restrict immigration to those who are likely to 
make the most desirable citizens, to regulate immigration in some 
degree in proportion to the actual needs of American industry, and 
finally to promote education in Europe, that it seems necessary at 
least to urge that this plan be given a practical test. 


12. The enactment of legislation providing that within six months 
om the time of entry all immigrants shall be required, under 
penalty of deportation, either to declare their intention to become 

C* 'izens by taking out their first papers or to definitely register them- 
ves with the proper authority as alien tourists, and further pro- 
ling that all immigrants w y ho have failed to take out their first 
pers at the end of two years shall be deported, as shall all who 
il to take out their second papers when they become eligible, de- 
portation in each case to act as a bar to future entry. 

3. The provision by the States and municipalities, with the assist- 
ance of the Federal Government, if necessary, for the education of 
all adult persons who are unable to speak, read, or write the English 

tnguage. In order to accomplish this it may be necessary to pro- 
de that employers shall grant certain definite periods of leisure 
r such instruction. 


The attention of the commission was directed to the labor condi- 
tions in American colonies by the strike of some 20,000 agricultural 
laborers in the island of Porto Rico, and by the appeal of the repre- 
sentatives of the Free Federation of Labor of Porto Rico for a hear- 
ing at which they might present their statement of the labor condi- 
tions, relations between laborers and employers, and the attitude 
assumed by the local Government during the strike. The commission 
granted the hearing and, in order that a full and fair presentation 
of the conditions should be made, invited the Government of Porto 
Rico to appoint representatives who were fully acquainted with the 
situation. As a result of the hearing of the testimony of these wit- 
nesses, a situation, was found which demands immediate attention 
in order that widespread and deep-rooted evils should be eliminated. 
These conditions are in large measure an inheritance from centuries 
of despotic Spanish rule, and it is undeniable that great improve- 
ments in certain lines have been accomplished under American ad- 
ministration. Nevertheless, a peculiar responsibility rests upon the 
American Nation for the conditions of the people in our colonial 
possessions who occupy the position morally and legally of w r ards of 
the Nation. 

The investigations were confined to the conditions in Porto Rico, 
but through the petitions filed with the commission by the inhabi- 
tants of other islands and through the information contained in re- 
ports of governmental officials, it seems certain that the labor condi- 
tions in all American colonies are generally similar to those in Porto 
Rico, and demand the attention of Congress. 

As a result of the investigations and a careful analysis of the 
extensive documentary evidence filed, the following statements with 
regard to industrial and social conditions in Porto Rico are war- 
ranted : 

1. Laborers in Porto Rico, including men, women, and children, 
are employed at wages which are inadequate to furnish proper food 
and clothing. The wages of men in agricultural districts range from 
35 to 60 cents a day, when employed, and those of the women and 
" ildren are about one-half this amount. 

38819 16 10 


2. As a result largely of the low-wage standard, the diet of the 
laborers, consisting chiefly of rice, beans, codfish, and plantains, is 
so miserably inadequate that the worker not only is rendered ineffi- 
cient but is to a large extent undernourished. 

3. The laborers are further exploited on the large plantations, 
according to the testimony of the Government representatives, by 
exorbitant prices for food and other supplies, by deliberate cheating 
as regards weights and measures, and by unwarranted deductions 
from their wages for goods that were never purchased. 

4. The educational facilities of Porto Rico are so totally inade- 
quate that there are nearly 200,000 children for whose education no 
provision has been made. 

The representatives of the colonial Government give a lack of 
ability to finance the educational system as the reason for the present 

5. Many thousand people yearly, located in the rural districts, far 
from medical attendance and unable to afford the high charges of 
the physicians, die without medical attendance. 

6. The labor laws of Porto Rico are inadequate, and the Bureau 
of Labor is not provided with sufficient funds to enforce the existing 
laws. The laws supposed to regulate the labor of women and chil- 
dren are generally violated. The provisions of the law restraining 
child labor are largely nullified by the insertion of a clause which 
permits this labor if the child is accompanied by a parent or other 

The employers' liability law of the island has the archaic fellow - 
servant clause in it and therefore is noneffective. 

7. The great majority of the Porto Ricans are landless, the land 
of Porto Rico being largely owned by the corporations, wealthy 
landlords, and the colonial Government and municipalities. Very 
little land is for sale. 

8. As a result, the land rents are inordinately high and tend very 
strongly to retard the development of a middle class. 

9. The housing conditions of the workers are extremely bad. The 
majority of the rural workers live in huts which do not cost more 
than $10 to build, and these huts are occupied, on an average, by five 
people each, although at best there are only semipartitions dividing 
the huts into two rooms. The existing conditions are a menace not 
only to health but to morality and every sense of decency. 

10. The laborers may be ejected from the huts provided by the 
employers at any time that the owner sees fit, and, while they pay no 
rent, they must and do work for the owner at his pleasure. 

11. In the cities the conditions are almost equally bad. The city 
laborers rent apartments or build little houses on rented land. As 
an illustration of this condition : There were, in 1912, 10,936 people 
in Puerto de Tierra. These people lived in 1,144 houses, and practi- 
cally 98 per cent of them were renters, as the occupants of only 30 
houses owned both house and land. The land of one owner, which 
was assessed at $6,340, brought in a total rent of $2,580, or 37.4 per 
cent. That of another, assessed at $29,460, yielded $7,821 in rent, or 
23.9 per cent. 

12. Unemployment is very prevalent in the island, and it has been 
testified that, largely as the result of stimulated immigration, there 
are between 200,000 and 300,000 more workers than jobs. 




13. The immigrants from the English-speaking islands or from 
the mainland are given preference over the native Porto Ricans, who 
speak Spanish. This has resulted in much hardship to the natives. 
11. The strike of agricultural laborers and other workers which 
;-an in January, 1915, was not only justified but was in the interests 
the progress of the island. The long hours, low wages, and ex- 
oitation of the laborers .could not have been relieved except by their 
ganized action. This is in accord with the testimony of the Govern- 
nt representatives. 

15. These laborers, hitherto unorganized, excitable, and filled with 
sense of the grievous wrongs which they and their families had 
ffered, were poorly disciplined and may have been guilty of excesses 
speech and action, although there is much evidence to indicate that 

ey were peaceful and law-abiding until provoked by the agents of 
e employers or by the police. 

16. Whatever may have been the actions of the strikers, however, 
there can be no excuse for the actions of the police and municipal 
authorities, who violated the personal rights of the strikers, treated 

em in many cases with wanton brutality, resulting in the death of 

rge numbers, held them in excessive bail, denied them access to the 
ordinary processes of the courts, and inflicted excessive and unwar- 
ranted punishments upon them. 

IT. The blame for such conditions appears to rest primarily upon 

e rural police and local magistrates. 

18. The demands for legislation made by the representatives of the 

ree Federation of Labor of Porto Rico appear to be wise and 
reasonable, but without an opportunity for full local investigation it 
is impossible to fully indorse them. 

It is suggested that the commission recommend provision by Con- 
gress for early and thorough investigation of the industrial and 

ial conditions in Porto Rico and all other American colonies. 



The investigations with reference to that section of the act which 
directed the commission to inquire " into the question of smuggling 
or other illegal entry of Asiatics into the United States or its insular 
possessions " were made largely under the direction of Mr. E. A. 
Fitzpatrick and Mr. E. H. Busiek. The extensive evidence collected 
regarding this entire question is contained in the report of Mr. Fitz- 
patrick, which is submitted herewith. 

The constructive suggestions and recommendations which have 
been approved by the special subcommittee on Chinese exclusion, con- 
sisting of Chairman Frank P. Walsh and Commissioners Harris 
Weinstock and James O'Connell, and accepted by the entire commis- 
sion, with reservations as to the agency of administration, are as 
follows : 



The following changes should be made in the law in the interest of 
administrative efficiency : 

1. That the many laws relating to the exclusion of Chinese be 
codified into a comprehensive statute. 


2. That Chinese alleged to have entered the United States sur- 
reptitiously shall be tried by administrative process, i. e., on Secre- 
tary of Labor's warrant in all cases irrespective of time of entry 
or defense of citizenship. 1 At the present time only Chinese alleged 
to have entered within three years may be tried on Secretary's war- 

3. That immigration officers be specifically given the power of 
arrest or taking into custody. 

4. That immigration officers be given the right to administer bind- 
ing oaths in all cases arising under the immigration law. 

5. That immigration officials be given the power to compel attend- 
ance of witnesses and the production of documentary or other evi- 
dence in all cases providing for punishment for contempt. 

6. That the attacking of an immigration official or interference 
with him in the performance of his duties, or any maltreatment of 
him growling out of the performance of his duties, should be made 
a penal offense. 

7. That the place of deportation to which contraband Chinamen 
shall be sent may be, in the discretion of the Secretary of Labor, the 
country whence he came, or the country of his citizenship, or the 
trans- Atlantic or trans-Pacific port from which he embarked for this 

8. That there be a clearer and more definite legislative definition 
of the exempt and of the admitted classes. 

9. That there be a clearer definition of legislative policy as to the 
status under the immigration and Chinese-exclusion law of China- 
men admitted as exempts and subsequently assuming a nonexempt 

10. That the pecuniary and family conditions for the return of 
Chinese laborers in the United States to China be repealed. 

11. That the recommendation of a new registration because it is 
needed to enforce the ^resent law be rejected. This must not be 
understood to mean a rejection of a new registration law as a part of 
legislative policy, but solely when it is urged for administrative 

12. That masters of vessels be responsible for every Chinese mem- 
ber of their crew who was on board the vessel when it enters and is 
not on board when it is ready for clearance. 

1 The anomalous citizenship situation. A Chinese person can not become a citizen by 
naturalization. The child of a Chinese alien man and woman, who themselves could 
never become citizens, would be, if born in the United States, an American citizen. The 
fact that the parents never intend that the child should be an American citizen, and the 
child itself even when grown up never regards himself as an American citizen except for 
purposes of the Chinese exclusion law, does not enter into the matter. The child of an 
American citizen born on foreign soil China or elsewhere is an American citizen. 

Chinese arrested for being unlawfully in the United States set up the claim of nativity. 
This claim is in many cases fraudulent. The matter is easy. A Chinaman, when ar- 
rested, is told to stand mute, or, if the story has been concocted, he tells a story like 
this : " I was born in San Francisco [or in some rural place, where there are no records of 
birth]. My father and mother returned to China when I was four years old. I remained 
with my clansman, Mr. Y-M-G, who has since returned to China or died. For the past 
four years I have remained with my uncle, who was at the baptismal shaving feast, 
and can testify to these facts." Uncle testifies. United States commissioner discharges 
the Chinaman, and if nativity was the defense the citizenship of the Chinaman is res 
judicata. Thus are citizens made. ' 

A rather dangerous situation is developing in this connection. In one large city of 
the country definite efforts are being made to vote the Chinaman and have his citizen- 
ship established that way. This of ^necessity brings the question into local politics and 
complicates further an already awkward situation. This situation ought to be cleared 
up. The fundamental change required is an amendment to the Constitution. 



11. That the jurisdiction of United States commissioners in Chi- 
ese-exclusion cases be abolished, or, what is less desirable. 1 
2. That the following changes in the system be made: United 
Jtates commissioners should receive adequate compensation for the 
service rendered. United States commissioners should be "made 
courts of record and stenographic and other expenses provided for. 
The Government should be given right of appeal in Chinese cases. 


1. That the handling of cases of contraband Chinamen should be 
andled by administrative rather than by judicial procedure. 

2. That the present administrative procedure be continued prac- 
ically without modification, except for the improved handling of 
ppeals as recommended elsewhere in these suggestions. 

3. That writs of habeas corpus should be issued only on the basis 
of a prima facie case. 

4. That in criminal cases (smuggling) full sentences should be 
imposed instead of light sentences as at present. 

5. That, if advisable, the cases of contraband Chinamen might be 
held under the board of special inquiry procedure provided for in 
cases of immigrants not passed upon primary inspection for admis- 
sion. The adoption of this suggestion would necessitate the employ- 
ment of a considerable number of additional men, and for this reason 
ought not to be adopted immediately. 


1. Definitely withdraw the order of 1905. 

2. By conference with Treasury Department provide for more 
careful sealing and supervision of sealed freight cars crossing the 

(a) By placing seal number and place of each car on the manifest. 

(b) By taking number and place of each seal of each car independ- 
ently and testing seal. 

I(c) By comparing local record with manifest immediately. 
(d) By examination of contents of each car where there is the 
east discrepancy or suspicion. 



1. That the position of Chinese inspector be revived. 

2. That the selection of Chinese inspectors by civil-service exami- 
nation for general immigrant inspectors be continued. 

3. That the present examination be changed in scope as follows : 
(a) That all papers now required be omitted ercept " practical 


1 All interests would be best served by an administrative rather than a judicial pro- 
cedure in cases of contraband Chinese. As usual, writs of habeas corpus would be issued 
by the courts in case of arbitrary action or of jurisdiction in these cases. 


(b) That greater credit larger proportion of examination be 
given for practical experience in handling the public. 

(c) That new examination in report writing be given to include 
a practical test in condensation material to relate to immigration, 
formulation of a report on a given statement of fact, letter writing. 

(d) That the examination include a test on Canadian immigration 
laws. * 

(e) That it include a test of knowledge of our National Govern- 
ment, particularly of those departments that are related to the work 
of immigration 

Treasury Department. 


The judicial system. 

Department of State. 

(/) That, if possible, an oral examination be included. 

(g) That the examination include somewhere questions on the 
relation of immigration and emigration to a national policy, on 
immigration as an internal policy, and a general history of immi- 

4. That the examination have specific reference in its questions to 
immigration work and not be mere general tests. 

5. That Chinese inspectors be selected from the more experienced 
immigrant inspectors who show an inclination and ability in the 
special requirements of this end of the service. 

6. That the probationary period of an immigrant inspector be one 


1. That in the selection of interpreters the present examination be 
continued except that, in testing ability to translate or interpret, 
actual cases be taken in course of routine work rather than the pres- 
ent moot examination. 

2. That in securing candidates for positions as interpreters the 
Immigration Service should look to the large number of Chinese 
students in our universities, particularly those who are here at the ex- 
pense of the United States Go vernment (the Boxer indemnity money). 

3. That the position of Chinese interpreter be graded into two 
grades at least, as follows : 

(a) Those who can interpret the spoken Chinese of one or more 

(&) Those who can in addition read the written language. 

4. That the salary program outlined for inspectors be adapted to 
the interpreters. 

5. That a conference be arranged by the various departments of 
Government who use interpreters of Chinese to work out some plan 
of securing honest, capable interpreters perhaps in cooperation with 
the universities. 


1. That there be established at Washington a staff organization 
including at least 

(a) Another Assistant Secretary of Labor to handle Chinese ap- 
peal cases, etc. 


(b) A central law organization providing for the continuous study 
of the legal aspects of immigration. 

(c) A central Chinese smuggling bureau, reenforcing district ad- 
ministration in its attempt to deal with smuggling gangs and other 
organized smuggling. 

(d) A central agency of training and inspection, providing for the 
continuous supervision and training of the men in the service. 

(e) A central clearing house of information and records. 

2. That it be specifically made a function of the division of super- 
vision and training to keep district officers informed as to 

(a) Significant court decisions in all districts. 

(b) Significant discoveries of district offices, e. g., the Japanese 
(Korean) passport case. 

(c) Effective methods of handling particular situations, e. g., of 
commissioner who refuses to give full credence to preliminary hear- 
ings before immigrant inspectors by bringing contraband China- 
men immediately before commissioner. 

(d) Chinese refused papers in any place. 

3. That this organization should keep field officers informed as to 
forward steps and other significant developments. 


1. That the service be regarded for salary purposes as a unit rather 
than as 23 individual units. 

2. That the administrative officers work out a detailed plan of 
graded salary increases. 

3. That there be an annual increase in salary of a definite amount 
for a definite number of years of service upon certification of meri- 
torious service during the preceding year. On the basis of an 
initial salary of $1,380, it seems to us there ought to be an annual 
increase of at least $36 per year for 15 years, making a maximum 
salary of $1,920. The specific amounts named are offered as sugges- 

4. That positions in the service ought to be graded and correspond- 
ingly higher initial salaries provided for the higher grades. The 
system of annual increases, perhaps of the same amount, ought to bo 

Erovided here. A larger increase for a less number of years might 
e advisable. It should be provided in this connection that a man 
promoted from a lower to a higher position, if he is receiving a 
higher salary than the initial salary of the higher position, should 
receive the next higher salary to the salary he is receiving in the 
lower position. A person standing in a little house watching those 
who come across an international bridge in Suspension Falls, another 
doing primary inspection work or board of inquiry work at Ellis 
Island, another working " under cover " among the thugs of Buffalo 
and being beaten into insensibility, another doing train inspection 
work would receive no pay because of differences of duties. It is 
submitted that some recognition of this difference in duties ought to 
find expression in the salary schedule. 

5. Superior service should be rewarded both by formal commenda- 
tion and by salary increases. Two provisions might be included : 

(a) The reward for a single brilliant piece of work, such as work- 
ing under cover with smugglers, risking one's life, and landing the 
gang in jail. 


(5) The provision of a higher annual increase for men giving 
continuous superior service. 


1. That there be a redistricting of the United States for immigra- 
tion purposes with more regard to geographical facts and to the 
efficiency of the service. 

2. That district offices take a periodic census in cooperation with 
the State or National Census or ,both, or, if necessary, independent 
of each. (This would help local offices to really see their problems. 
It would acquaint them with their constituency.) 

3. That this census be kept up to date and supplemented by coop- 
eration with municipal and State boards of health and bureaus of 
vital statistics by recording currently 

(a) Chinese births. 

(b) Chinese deaths. 

(c) Chinese marriages. 

4. That this census be kept up to date and supplemented by making 
part of the record all the examinations of Chinese in connection with 
routine and other investigations. A system of cross reference cards 
should be on file in Washington. It should be kept up to date and 
supplemented by listing removals and advising as far as possible the 
district to which the Chinaman moved. 

5. That the force should be increased and the whole group of in- 
spectors be organized for regular field work. This should take the 
place of any system of national arrest crews. 

6. That the system of rewards of conductors, trainmen, and police- 
men who supply information leading to arrests of contraband Chi- 
nese or smugglers, which seems now in abeyance, be revived and be 
provided for in an emergency fund for each district. (Approval 
of Washington perhaps should be required in each case.) 

7. That a business and occupation census of each district accom- 
pany the census of persons. 

8. That the force of immigrant inspectors assigned to Chinese 
work be increased. 

9. That the equipment to be used in the work of administering the 
Chinese exclusion law be adequate to cope with the smugglers. 



1 See supplemental statement. 





Charged by your honorable body with an investigation to discover 
e underlying causes of dissatisfaction in the industrial situation, 
we herewith present the following findings and conclusions, and we 
urge for them the most earnest consideration, not only by the Con- 
ress, but by the people of the Nation, to the end that evils which 
reaten to defeat American ideals and to destroy the well-being of 
e Nation may be generally recognized and effectively attacked. 



We further find, that unrest among the workers in industry has 
grown to proportions that already menace the social good will and 
the peace of the Nation. Citizens numbering millions smart under a 

Tnse of injustice and of oppression, born of the conviction that the 
)portunity is denied them to acquire for themselves and their 
families that degree of economic well-being necessary for the en joy - 

^ of those material and spiritual satisfactions which alone make 
fe worth living. 

Bitterness, bred of unfilled need for sufficient food, clothing, and 
shelter for themselves and their wives and children, has been further 
nourished in the hearts of these millions by resentment against the 
arbitrary power that enables the employer, under our present indus- 
trial system, to control not only the workman's opportunity to earn 
his bread, but ofttirnes, through the exercise of this power, to dictate 
his social, political, and moral environments By thwarting the 
human passion for liberty and the solicitude of the husband and 
father for his own, modern industry has kindled a spirit in these dis- 
satisfied millions that lies deeper and springs from nobler impulses 
than physical need and human selfishness. 

Among these millions and their leaders we have encountered a 
spirit religious in its fervor and in its willingness to sacrifice for a 
cause held sacred. And we earnestly submit that only in the light of 
this spirit can the aggressive propaganda of the discontented be 
understood and judged. 

The extent and depth of industrial unrest can hardly be exag- 
gerated. State and national conventions of labor organizations, 
numbering many thousands of members, have cheered the names of 
leaders imprisoned for participation in a campaign of violence, con- 
ducted as one phase of a conflict with organized employers. Thirty 
thousand workers in a single strike have followed the leadership of 
men who denounced government and called for relentless warfare 
on organized society. Employers from coast to coast have created 
and maintained small private armies of armed men and have used 
these forces to intimidate and suppress their striking employees by 



deporting, imprisoning, assaulting, or killing their leaders. Elabo- 
rate spy systems are maintained to discover and forestall the move- 
ments of the enemy. The use of State troops in policing strikes has 
bred a bitter hostility to the militia system among members of labor 
organizations, and States have been unable to enlist wage earners 
for this second line of the Nation's defense. Courts, legislatures, 
and governors have been rightfully accused of serving employers to 
the defeat of justice, and, while counter charges come from em- 
ployers and their agents, with almost negligible exceptions it is the 
wage earners who believe, assert, and prove that the very institu- 
tions of their country have been perverted by the power of the em- 
ployer. Prison records for labor leaders have become badges of 
honor in the eyes of many of their people, and great mass meetings 
throughout the Nation cheer denunciations of courts and court de- 

To the support of the militant and aggressive propaganda of or- 
ganized labor has come, within recent years, a small but rapidly in- 
creasing host of ministers of the gospel, college professors, writers, 
journalists, and others of the professional classes, distinguished in 
many instances by exceptional talent which they devote to agitation, 
with no hope of material reward, and a devotion that can be ex- 
plained only in the light of the fervid religious spirit which animates 
the organized industrial unrest. 

We find the unrest here described to be but the latest manifestation 
of the age-long struggle of the race for freedom of opportunity for 
every individual to live his life to its highest ends. As the nobles 
of England wrung their independence from King John, and as the 
tradesmen of France broke through the ring of privilege inclosing 
the Three Estates, so to-day the millions who serve society in arduous 
labor on the highways, and aloft on scaffoldings, and by the sides of 
whirring machines, are demanding that they, too, and their children 
shall enjoy all of the blessings that justify and make beautiful this 

The unrest of the wage earners has been augmented by recent 
changes and developments in industry. Chief of these are the rapid 
and universal introduction and extension of machinery of production, 
by which unskilled workers may be substituted for the skilled, and 
an equally rapid development of means of rapid transportation and 
communication, by which private capital has been enabled to organize 
in great corporations possessing enormous economic power. This 
tendency toward huge corporations and large factories has been fur- 
thered by the necessity of employing large sums of capital in order 
to purchase and install expensive machinery, the use of which is 
practicable only when production is conducted on a large scale. 
Work formerly done at home or in small neighborhood shops has 
been transferred to great factories where the individual worker be- 
comes an impersonal element under the control of impersonal cor- 
porations, without voice in determining the conditions under which 
he works, and largely without interest in the success of the enterprise 
or the disposal of the product. Women in increasing numbers have 
followed their work from the home to the factory, and even children 
have been enlisted. 

Now, more than ever, the profits of great industries under central- 
ized control pour into the coffers of stockholders and directors who 


Iver have so muck as visited the plants, and who perform no 
rvdce in return. And while vast inherited fortunes, representing 
zero in social service to the credit of their possessors, automatically 
treble and multiply in volume, two-thirds of those who toil from 

Kto 12 hours a day receive less than enough to support themselves 
nd their families in decency and comfort. From childhood to the 
grave they dwell in the shadow of a fear that their only resource 
their opportunity to toil will be taken from them, through acci- 
dent, illness, the caprice of a foreman, or the fortunes of industry. 
The lives of their babies are snuffed out by bad air in cheap lodgings, 
and the lack of nourishment and care which they can not buy. 
Fathers and husbands die or are maimed in accidents, and their 
families receive a pittance, or succumb in mid-life and they receive 


And when these unfortunates seek, by the only means within reach, 

better their lot by organizing to lift themselves from helplessness 
some measure of collective power, with which to wring living 
wages from their employers, they find too often arrayed against 
them not only the massed power of capital, but every arm of the 
Government that was created to enforce guaranties of equality and 

We find that many entire communities exist under the arbitrary 
economic control of corporation officials charged with the manage- 
ment of an industry or group of industries, and we find that in such 
communities political liberty does not exist, and its forms are hollow 
mockeries. Give to the employer power to discharge without cause, 
to grant to or withhold from thousands the opportunity to earn 
bread, and the liberties of such a community lie in the hollow of the 
employer's hand. Free speech, free assembly, and a free press may 
be denied, as they have been denied time and again, and the employ- 
er's agents may be placed in public office to do his bidding. 

In larger communities where espionage becomes impossible the 
wage earner who is unsupported by a collective organization may 
enjoy freedom of expression outside the workshop, but there his 
freedom ends. And it is a freedom more apparent than real. For 
the house he lives in, the food he eats, the clothing he wears, the en- 
vironment of his wife and children, and his own health and safety 
are in the hands of the employer, through the arbitrary power which 
he exercises in fixing his wages and working conditions. 

The social responsibility for these unfortunate conditions may be 
fixed with reasonable certainty. The responsibility, and such blame 
as attaches thereto, can not be held to rest upon employers, since in 
the maintenance of the evils of low wages, long hours, and bad 
factory conditions, and in their attempts to gain control of economic 
and political advantages which would promote their interests, they 
have merely followed the natural bent of men involved in the 
struggle of competitive industry. The responsibility for the condi- 
tions which have been described above we declare rests primarily 
upon the workers who, blind to their collective strength and often- 
times deaf to the cries of their fellows, have suffered exploitation 
and the invasion of their most sacred rights without resistance. A 
large measure of responsibility must, however, attach to the great 
mass of citizens who, though not directly involved in the struggle 


between capital and labor, have failed to realize that their own pros- 
perity is dependent upon the welfare of all classes of the community, 
and that their rights are bound up with the rights of every other 
individual. But, until the workers themselves realize their respon- 
sibility and utilize to the full their collective power, no action, 
whether governmental or altruistic, can work any genuine and last- 
ing improvement. 

Fourteen years before Abraham Lincoln was called to the high 
office where he immortalized his name, he uttered these great truths : 

Inasmuch as most good things are produced by labor, it follows that all 
such things of right belong to those whose labor has produced them. But it has 
so happened in all ages of the world that some have labored and others have 
without labor enjoyed a large proportion of the fruits. This is wrong and 
should not continue. To secure to each laborer the whole product of his labor, 
or as nearly as possible, is a worthy subject of any good Government. 

With this lofty ideal for a goal, under the sublime leadership of 
the deathless Lincoln, we call upon our citizenship, regardless of 
politics or economic conditions, to use every means of agitation, all 
avenues of education, and every department and function of the 
Government, to eliminate the injustices exposed by this commission, 
to the end that each laborer may " secure the whole product of his 


NOTE. Chairman Frank P. Walsh also presented the following 
dissenting opinion: 

Although I have signed the report prepared by Mr. Basil M. 
Manly, director of research and investigation, because I believe 
it represents an unassailable statement of the existing industrial sit- 
uation, because it fully complies with the requirements of the act of 
Congress creating the commission, and because the recommendations 
are as a whole wise and necessary for the welfare of the Nation, I, 
nevertheless, desire to record my dissent on the following points : ^ 

1. The recommendation for new administrative machinery for 
mediation and arbitration in the form of a special commission. I 
believe that the commission created by the Newlands Act, and the 
Department of Labor, if their powers are enlarged and they are 
adequately supported, will be fully able to deal with the situation. 

2. The recommendations for a literacy test as a method of restrict- 
ing immigration. I wish to record my opposition, as a matter of 
principle, to all restrictions upon immigration. 

3. The recommendations regarding civil government in such 
isolated communities as coal camps, which I believe can not be ade- 
quately dealt with except by the Government taking over all coal lands 
and leasing them upon terms which will make possible their operation 
upon a cooperative basis by the workers. 

Notwithstanding many meritorious statements contained in the 
report of Commissioners John R. Commons and Florence J. Harri- 
jnan, I feel it my duty to dissent from the same in toto, for the 
reasons following: 

1. It wholly fails to comply with the law creating the commission, 
in that it does not set forth the facts regarding the condition of labor 
in the leading industries of the United States and the underlying 
causes of industrial dissatisfaction. 

| V 


2. The whole scheme of the control of labor, and the laws govern- 
g the same, is undemocratic and not in accord with the established 

rinciples of representative government. 

3. The entire plan suggested is opposed to the habits, customs, and 
aditions of the American people. 

4. The suggestions in the main are impractical and impossible of 

5. It opens up unlimited opportunities for graft and corruption. 

6. If the ponderous legal machinery provided for in this report 
could be put in operation throughout our Nation, it would mean 
(a) that the economic condition of the workers of the country would 

absolutely subjected to the whim or caprice of an army of officials, 
eputies, and Government employees, and ( b ) the establishment of an 
autocratic control over the business operations of manufacturers, 
merchants, and other employers, repugnant to American standards of 
freedom in manufacture and commerce. 



My signature is appended to the report of Mr. Basil M. Manly, 
director of research and investigation of the United States Commis- 
sion on Industrial Relations, submitted to the commission and trans- 
mitted herewith, as to the findings of fact contained therein. 

I am in general agreement with the recommendations contained in 
that report except as to the formation of the system of State and 
Federal commissions and a Federal industrial council. 

On this recommendation I neither approve nor condemn. But out 
of regard for the opinion of the great body of intrastate labor most 
directly affected, I dissent. 

I am also in accord with the statement of fact contained in the 
report of George P. West on the Colorado situation. 

I am favorable to the extension of the provisions of the Newlands 
Act to all classes of interstate employees who can constitutionally be 
brought under its provisions and would favor the enlargement of the 
body administering it to meet the added responsibilities which would 
thereby be placed upon it, but limiting the powers thereof to the 
settlement of industrial disagreements and to the gathering of infor- 
mation germane to their mission. 

I favor the creation of State commissions, similarly constituted and 
acting in corelation and understanding with the Federal board. 

I heartily concur with the report of Commissioners Lennon and 
O'Connell except on those points where disagreement is herein noted. 
I dissent in whole from report rendered by Commissioner J. E. 
Commons. I render individual opinion and suggestion only on 


Any student who accepts and applies the belief that the "proper 
study of mankind is man " can not fail to trace certain fundamental 
causes, general in their character, which underlie industrial unrest 
which will continue to grow until either the causes are peacefully 
removed or revolution ensues. 

To me there appear to be four of these basic causes. 

The first lies in the inequitable distribution of the fruits of 

Our industrial system makes it possible for one man, in only a 
portion of the span of human productive life, to take unto himself 
and claim as his own a fortune of a hundred millon dollars or more, 
while millions of deserving men, availing themselves of every oppor- 
tunity for unremitting toil, are only able to secure a grave in the 
potters' field or else burden their families with an installment debt 
for the cost of interment. 



The creation of such, colossal fortune naturally breeds in the mind 
of the possessor the sentiment, belief, and practice that he is superior 
to society and not subject to the law. The possession thereof makes 
him unregardful of the opinions of society or of the mandates of 
the law, incites him to disregard and hold himself independent of 
the moral precepts and beliefs of society and tends toward the effort 
to prostitute the administration of justice, and under the present 
system renders him practically immune from the penalties prescribed 
by the law. 

The transmission to heirs or trustees, degenerate or otherwise, of 
fortunes so vast or of business interests so far-reaching makes them 
the virtual arbiters of the destiny of hundreds of thousands of their 
fellow beings in regard to whom they have neither sympathetic 
feeling, intelligent interest, nor humanitarian desire, and the testi- 
mony before this commission has made it evident that in some 
instances these heirs or representatives even resent the imputation 
that any obligation whatever can rest upon them for the welfare of 
the said fellow beings or that even intelligent knowledge as to what 
would constitute well-being should be required of them. 

Second, the methods of the formation and administration of law 
would in themselves justify undying, righteous unrest from the fact 
that they create, encourage, and demonstrate knowledge and belief 
that there is no equality before the law as between the man who has 
and the man who has not. 

Primarily there is the trend through legislation to exalt the prop- 
erty right at the expense of the personal right. Next, the tendency 
of a great majority of our courts to extend and amplify this trend. 
This appears in the declaring unconstitutional of a great portion of 
the legislation that in later years is appearing if it in any way 
restricts the rights of property, while at the same time any legisla- 
tive act which tends to make effective the constitutional, personal 
right of the individual is nullified upon the same ground. 
In other words, to exalt money above man. 

The tendency also of a large number of the same tribunals is to 
legalize the maintenance of armed forces, either by the corporation 
or the large individual employer, and the virtual levying of war 
through the use of the State militia as a private guard for property 
interests, or as an economic weapon for the purpose of prejudicing 
the interests of the worker, is abetted and approved, while at the 
same time rigorously prosecuting and punishing the individual for 
taking any similar action, individually or collectively, in defense of 
his person or his family. 

Thus the man who uses a deadly weapon to protect himself or his 
home against the aggression of hired thugs has set in motion against 
him the whole machinery of the State, while the corporation which 
enlisted, equipped, and paid a private armed force, formed and 
used not for the maintenance of peace or the protection of property 
but solely as an economic weapon, is lauded as a conservator of peace, 
law, and order. 

Our laws deal strictly and effectively with those who contribute 
to the delinquency of an individual, but the hirelings of a corpora- 
tion may debauch a State for their own economic gain and receive 
only laudation from those who " sit in the seats of the mighty." 


The man who, on account of hunger of himself or family, steals a 
loaf is held up to public view as a " horrible example " of the in- 
crease of crime and decadence of the moral sense, while he who 
exploits the public or by dishonest or fraudulent representation or 
manipulation secures millions of their money is by the same agencies 
held up to the youth of the land as an example of what intelligent 
effort and devotion to business may accomplish. 

The system of wholesale arrests during industrial disturbances for 
acts which, committed under ordinary conditions and when no indus- 
trial disturbances prevailed, would not constitute ground for arrest, 
is one of the significant indications of the use of governmental 
agencies, not as a preserver of peace but as a purely economic weapon. 

The intrusion of what has been aptly described as " invisible gov- 
ernment " into all the chanels of life the educational system, pri- 
mary, secondary, and higher, the church, the press, the legislative 
branch, and the judicial system and the recognized potency of its 
meretricious efforts contributes its elements to the whole. 

Third, irregularity of employment, with the consequent restriction 
of opportunity and with its consequent extension of belief that unre- 
mitting -toil under present conditions can bring no fair recompense, 
thus stifling healthy incentive to labor, is creating an army of unem- 
ployed that must, in the last analysis, be reckoned with, and unless 
remedy is found whereby incentive may be restored and recompense 
be made apparent, society itself must pay the forfeit. 

Fourth, land monopoly with resulting prohibitive price, the great- 
est influence in creating congestion in the cities, bears its own share 
of the responsibility for unrest. 

Tracing the history of every vanished civilization makes apparent 
the fact that in every instance decadence was preceded by urban 
congestion and by immense land holdings by the aristocrat or the 

As to the remedy for these evils, an income and inheritance tax 
that would be, above a certain figure, absolutely confiscatory would 
make impossible, first, the creation, and, second, the transmission of 
the dominating accumulation of wealth in the hands of any indi- 
vidual, group, or family. When the unlimited power of reward or 
purchase had ceased to exist, the subconscious tendency of legisla- 
tures and of those who interpret and administer the law to be sub- 
servient to property interests would of necessity disappear. 

It is worth consideration as to whether or not a limitation can 
properly be set upon profit in a business enterprise. 

Every code, ancient and modern, prescribes penalties for usury, 
and modern codes define the rate of interest permitted. Therefore, 
if a man loans money, he can only demand what is described as the 
legal rate for the use thereof. 

Is it, or is not, equally consistent for the Government to prescribe 
a rate beyond which profit shall not extend ? 

In the question of dealing with land, should not the same doctrine 
be applied to land that in the arid States is applied to water, i. e., 
that no more land can t>e held by an individual than he can put to 
productive " use," thus making unused land revert to the State and 
acquirable by tho^e who would utilize it? 



Our signatures are appended to the report of Mr. Basil M. Manly, 
director of research and investigation of the United States Commis- 
sion on Industrial Relations, submitted to the commission at its 
session held in Chicago during the months of July and August, 1915, 
except that portion of the report recommending a system of media- 
tion, conciliation, investigation, and arbitration, applicable to both 
State and Nation, which proposes to create a commission of three 
members, together with an advisory council of 20 members, 10 repre- 
senting employers and 10 representing employees. The entire plan 
is set forth in the report of the staff as submitted to the Commission 
on Industrial Relations; also in a report to the commission by Prof. 
George E. Barnett, and also in the report of Commissioner John R. 
Commons. From these recommendations we dissent for reasons 
assigned in this statement. 

The evidence submitted to the commission at public hearings, to- 
gether with the evidence secured by special investigators, has been 
fairly set forth in Mr. Manly 's report and with even justice to all, 
whether employers, employees, or the public. 


Our fellow commissioners who are representatives of the employers 
contend in their statement that the report of Mr. Basil M. Manly 
for the staff is deficient in that it does not properly present an in- 
dictment against labor on the grounds of fostering and promoting 
violence in trade disputes, jurisdictional disputes accompanied by 
strikes, limitation of output, sympathetic strikes, contract break- 
ing, apprenticeship rules, refusal to use nonunion materials, 
alleged graft, and so forth, and that it does not include these 
things among the fundamental causes of industrial unrest. All 
the evidence submitted to the commission, as we understand and 
interpret it, proves that these things, in so far as they do exist, are 
in no sense causes of industrial unrest but, on the contrary, are 
evidences of existing industrial unrest and are evils that are inci- 
dental to a situation wherein labor has at times been forced to fight 
with such weapons as it could command for advantages and rights 
that in justice should be freely accorded to the wage earners. So 
long as labor organizations are forced by employers to fight for the 
mere right to exist, and so long as wages paid to labor are so low 
that the unorganized w r age earner often sees no choice except that be- 
tween resorting to such weapons or seeing himself and his family 
sink below the poverty line, just so long will these evils at times 
manifest themselves as symptoms of the worker's desperation. The 
union, fighting for its right to live, is sometimes forced to tolerate 

38819 16 11* 161 


acts that would not be countenanced if its entity were secure and its 
energies were not absorbed in fighting for existence. 


Experience shows that the evils complained of rapidly disappear 
in labor organizations as soon as the organization prevails over the 
opposition of the employers and establishes its right to organize. 
Strong unions mean decent wages, and decent wages raise w r age 
earners to a plane of thought and action where all their acts and 
mental processes must no longer be directed toward a desperate 
struggle for the very right of themselves and families to live. 

Organized labor fully realizes how unfortunate it is that labor in 
its struggle for existence has occasionally been driven to consider its 
immediate advantage at the expense of the true economic principles 
that must govern in the long run. All the energies of organized 
labor's representatives have been exerted to minimize or eliminate 
any tendency toward limitation of output or jurisdictional disputes, 
but, at the same time, organized labor insists that these tendencies 
where they exist are the logical and inevitable outgrowth of evils in 
industry that can be removed only by trade-union action by the 
wage earners. We could cite evidence at great length to show that 
the tendencies complained of, so far as they exist at all, have grown 
out of the hard necessities with which labor has been confronted. 
It is enough here to quote briefly from the testimony of the distin- 
guished economist, Prof. Jacob H. Hollander, of Johns Hopkins 
University, given before this commission in New York City on 
January 20, 1915. Prof. Hollander in discussing the limitation of 
output said : 

We lose sight of the fact that trade-unions and unionists are not soldiering 
in the matter, but they are animated by a very high degree of fraternity 
in the matter, that they are willing to adopt the same principle if it is a matter 
of piecework instead of time work ; that the endeavor of society should be to 
bring back industrial conditions from that unwholesome mess into which they 
have slumped from this abnormal disproportionate allotment of w r orkers to 
particular fields in excess of the requirements in those fields. We must without 
deviating one iota from the proposition which you have stated that it is socially 
unsound that workmen should do less than they properly could society should 
seek to bring about conditions where they will do what they can without in- 
volving displacement and unemployment on the part of their fellow workmen. 

We hold that the report of Mr. Manly contains no statement that 
is unworthy of credence, and that will not bear careful investigation. 
The conclusions and recommendations are warranted by the state- 
ment of facts and the accumulated evidence in the hands of the 


All evidence accumulated, whether by special investigators or at 
public hearings, will be submitted to Congress, and we trust the peo- 

Ele of our country will demand that it be published in full, particu- 
trly the following, which are well worth the most careful study by 
all persons interested in human welfare. The reports cited below 
have been prepared by competent investigators and were submitted 
to the commission after careful investigation and verification by 


Director Basil M. Manly and by members of the commission, and are 
the latest information upon the various subjects covered by them. 1 

Evidence Taken at All Public Hearings. 

Causes of Industrial Unrest, by Mr. W. J. Lauck. 

Violence in Labor Disputes, by Mr. Luke Grant. 

Structural Iron Workers, by Mr. Luke Grant. 

Sickness Prevention and Insurance, by Dr. B. S. Warren. 

Mediation, Arbitration, and Investigation, by Prof. Geo. E. Barnett, 

Conditions of Labor in Principal Industries, by Mr. Edgar 

Efficiency Systems in Industry, by Prof. Robert F. Hoxie, Mr. 
John P. Frey, and Mr. Robert G. Valentine. 

Industrial Education, by Commissioner John B. Lennon. 

Labor Complaints and Claims, by Mr. P. A. Speek. 

Trade-Union Law, by Mr. J. W. Bryan. 

Colorado Situation, by Mr. George P. West. 

The Telephone and Telegraph Industry, by Mr. Christopher T. 

Labor Conditions in Porto Rico, by Mr. Christopher T. Chenery. 

Labor Conditions in the Black Hills, by Mr. William P. Harvey. 

Labor Conditions in Los Angeles, by Mr. William P. Harvey. 

Preliminary Report on the Land Question, by Mr. Charles W, 

Agricultural Labor and Tenancy, by Mr. John L. Coulter. 

Unemployment, by Mr. William M. Leiserson. 

Extent and Growth of Labor Organizations, by Mr. Lee Wolman. 

Injunctions in Labor Disputes, by Mr. Edwin E. Witte. 

The Inferior Courts and Police of Pater son, N. J., by Mr. Red- 
mond S. Brennan and Mr. Patrick F. Gill. 

Chinese Exclusion, by Mr. Edward A. Fitzpatrick. 


The principal duty imposed, under the law creating the commis- 
sion, was to seek to ascertain the causes of industrial unrest and offer 
such recommendations as we believe might alleviate that unrest. 
There can be no question but that unrest exists, in some instances, to 
an alarming extent. Thousands and tens of thousands of our people 
feel that they are deprived, under existing conditions in industry, of 
an opportunity to secure for themselves and their families a standard 
of living commensurate with the best ideals of manhood, womanhood, 
and childhood. They resent the fact that the existing system of the 
distribution of wealth creates at one end of our industrial scale a few 
multi-millionaires and at the other end thousands and tens of 
thousands of men, women, and children who are at all times in a 
situation where they are uncertain as to where their next meal will 
come from. Hungry, poorly clothed, and without the opportunities 
that a fully rounded life requires, they become filled with a sullen 
resentment that bodes no good for the future of our Republic. 

We have found men and women who are inclined to ascribe this 
condition to the fact that the Government exercises no power of 
mandatory character to prevent strikes and lockouts. Many have 

1 These reports have not been printed with this document, on the recommendation of 
Chairman Frank P. Walsh, as stated in his letter in Senate Report No. 143, Sixty-fourth 
Congress. The reports on Structural Iron Workers and the Colorado Situation were 
printed by the commission itself in 1915. 


been the propositions submitted to us for compulsory arbitration or, 
at least, compulsory investigation with power to recommend a settle- 
ment. Some have proposed an elaborate machinery, to be set up by 
the General Government, and of a similar character by the States, 
providing for conciliation, mediation, arbitration, and investigation, 
all of which, while without definite compulsory features, establishes a 
legal machinery that must of necessity exercise an influence in that 

The plan for the creation of an industrial commission, both na- 
tional and State, proposes to assign to a commission of three mem- 
bers the administration of all labor laws of either State or Nation, 
giving to them powers far in excess of those exercised by the Presi- 
dent of the United States or the governor of any State. This we 
believe to be bureaucracy run mad, and a subversion of democracy 
dangerous to the civil and social liberty of all citizens. We hold that 
all power should be, in the final analysis, with the people, and we, 
therefore, dissent from any such plan. 


The activities of such a commission, supplemented by the proposed 
advisory committees of employers and labor representatives, would 
be so balanced as to prevent substantial progress and tend to per- 
petuate present conditions. Such a plan conceives of labor and 
capital as static forces and of the relations between them as always 
to remain unchanging. 

We believe that the work now being done by the Department of 
Labor in industry generally, and by the Board of Mediation and 
Conciliation, dealing with interstate public utilities, is better than 
any that could be expected of any additional board that has been 
suggested to this commission. We believe that the Department of 
Labor, with further experience and larger appropriations, will de- 
velop a high state of efficiency in adjusting labor disputes that are 
capable of being adjusted by anyone other than the parties directly 
interested and will adequately carry on the work provided by the 
law creating the Department of Labor, to wit : 

SECTION 1. The purpose of the Department of Labor shall be to foster, pro- 
mote, and develop the welfare of the wage earners in the United States, to 
improve their working conditions, and to advance their opportunities for 
profitable employment. 

SEC. 8. The Secretary of Labor shall have power to act as mediator and to 
appoint commissioners of conciliation in labor disputes whenever in his judg- 
ment the interests of industrial peace require it to be done. 

We favor the extension of the Newlands Act to cover all employees 
engaged in interstate commerce, such as the railroad telegraphers, 
the shop and track men employed by railroads, the employees of 
express companies, of the Pullman Co., of commercial telegraph 
and telephone companies, and other public utilities performing inter- 
state service that, in the interest of the Nation, must be continuous. 

The evidence submitted to this commission is substantially to the 
effect that where trade-union organization exists among the workers, 
there, at the same time, exists the least amount of industrial unrest 
of a character that is dangerous to the peace and welfare of our 
Nation. It is true that the union men and women are not satisfied 
with their conditions; they are not, however, despondent as to the 


possibility of securing better conditions ; they know what the unions 
have accomplished, and they have an abiding faith that their further 
desires can be attained. 

Instead of any elaborate machinery for the prevention of strikes 
or lockouts we are convinced, from the testimony gathered by this 
commission, that the most effectual course that can be pursued to 
bring about general contentment among pur people, based upon a 
humane standard of living, is the promotion of labor organization. 
The most casual investigator will soon discover that in those lines 
of industry where organization of labor is the strongest, there is the 
least danger of industrial revolt that would endanger the funda- 
mental principles of our Government and the maintenance of a 
nation with respect for law and order. Where organization is lack- 
ing dangerous discontent is found on every hand; low wages and 
long hours prevail ; exploitation in every direction is practiced ; the 
people become sullen, have no regard for law or government, and are, 
in reality, a latent volcano, as dangerous to society as are the vol- 
canoes of nature to the landscape surrounding them. 


We therefore urge as the great remedy for such unnecessary in- 
dustrial unrest as we have found more, and more, and still more 
organization of labor and of the employers in each industry as well. 
The education of the trade unions has been conducive to a higher 
and better citizenship. In recent years there have come to our assist- 
ance scores and hundreds and thousands of people outside the ranks 
of unionists ministers, professors, journalists, professional men of 
all kinds who have reached the conclusion that is herein stated, that 
the most efficient cure for such industrial unrest as should be cured, 
is union organization. 

We hold that efforts to stay the organization of labor or to restrict 
the right of employees to organize should not be tolerated, but that 
the opposite policy should prevail, and the organization of the trade 
unions and of the employers' organizations should be promoted, not, 
however, for the sole purpose of fighting each other, but for the com- 
mendable purpose of collective bargaining and the establishing of 
industrial good will. Organizations of employers that have no 
object in view except to prevent labor having a voice in fixing the 
conditions of industry under which it is employed have no excuse 
for existence, as they are a bar to social tranquillity and a detriment 
to the economic progress of our country. The evidence before the 
commission shows that organized labor has no desire, nor has it 
attempted, to control the business of the employer. It insists that 
it has a right to a voice, and a potent voice, in determining the con- 
ditions under which it shall work. This attitude, we are sure, will 
be continued in spite of the opposition of any so-called employers' 
organizations. This country is no longer a field for slavery, and 
where men and women are compelled, in order that they may live, 
to work under conditions in determining which they have no voice, 
they are not far removed from a condition existing under feudalism 
or slavery. 

In emphasizing with all the force at our command the necessity of 
collective action by wage earners through strong organizations, if 


the problem of industrial unrest is to be solved, we wish again to 
quote from testimony of Prof. Hollander. He undertook to sum 
up for this commission those conclusions regarding the solution of 
this problem that have been reached not only by himself, but by the 
great body of economists in this country and abroad. He said : 

The opinion of political economists in so far as I can voice it is 
that social unrest, which is manifest not only in this country but in 
every industrial country, is due to the existence of economic want or 
poverty, if by that we understand not on the one hand pauperism or 
on the other economic inequality. By poverty I mean the existence 
of large areas of industrial society in receipt of incomes less than 
enough to maintain themselves and those dependent upon them in 
decent existence. We believe that is the consequence, not of any abso- 
lute dearth that the world produces enough to go around; that it 
is, therefore, not a question of insufficient production, but of defects 
in distribution. * * * There is a view among economists that 
there is nothing in any current theory of wages that precludes the 
laborer from obtaining a sufficient wage, and that if he fails it must 
be in consequence of the fact that he enters into the wage contract 
on a plane of inequality. The wage contract, in short, is the result 
of a bargain between the employer and the employee, and if the 
employer is in a superior competitive position by reason of combina- 
tion and the laborer is unorganized he is at a bargaining disadvan- 
tage which is certain to redound to his hurt. 

I think political economists accordingly then are in agreement 
that trade unionism is essential as a means of bringing the workmen 
into industrial bargaining on a plane of equality. 


You have asked specifically what the remedy [for poverty] is. It 
means a very decided revulsion of opinion as to trade unionism. The 
general attitude among employers of labor is often open and decided 
opposition to organized labor. Until society recognizes the unwis- 
dom of that attitude and demands that the laborer must enter into 
his wage bargain on a plane of competitive equality, society has not 
lifted its finger to remedy that evil. 


We submit the report of Mr. Basil M. Manly as our report, asking 
for it the fullest possible consideration by the men and women of 
our country who are interested in the social and moral uplift of 

Labor must work out its own salvation. Wageworkers can attain 
that degree of well-being to which they are entitled only by their own 
efforts. The general public can not be expected to do for them what 
they fail to do for themselves, nor would it be desirable that those 
rights and benefits to which they are entitled should be handed down 
to them by the Government or by organized society as grace from 
above. But the general public is vitally interested 'in the efforts of 
wageworkers to win for themselves equal justice and such a degree 
of material well-being as will enable them to maintain themselves 
and their families in comfort, security, and health. Society's interest 
in the triumph of labor's cause should spring not only from the love 
of justice and the human sympathy that animates every good citizen, 


but from a realization that industrial and social evils menacing large 
groups of the population can not continue without eventually bring- 
ing disaster to society as a whole. While inviting the aid of every 
good citizen, we, as representatives of organized labor, urge that this 
aid be directed not solely to seeking new legislation or new govern- 
mental machinery designed as a cure-all, but to giving moral support 
to labor's own efforts, and insisting that trade unions be fostered and 
encouraged as the most effective agencies making for the wage- 
workers' progress. 

We concur in, and adopt as a part of our report, the statement 
under the heading " Supplemental statement of Chairman Frank P. 

We concur in the dissenting opinion of Chairman Frank P. Walsh 
from the report of Commissioners John R. Commons and Florence J. 

We concur in that part of the report of Commissioner Austin B. 
Garretson under the heading " Causes underlying industrial unrest." 

We concur in the history and statement of facts regarding the 
Colorado strike, as written by Mr. George P. West, which is printed 
as an addendum to this report. 1 


1 The report by Mr. George P. West has not been printed with this document, on the 
recommendation of Chairman Frank P, Walsh, as it was printed by the commission .Itself 
In 1915. See his letter in Senate Report No. 143, Sixty-fourth Congress. 


Report of Commissioners John R. Commons 
and Florence J. Harriman 


Commissioners Commons, Harriman, Weinstock, 
Ballard, and Aishton 


The Dissenting Opinion of Commissioner Weinstock, the Report of 

Commissioners Weinstock, Ballard, and Aishton, and the 

Supplemental Statement of Commissioner Ballard 





We can not find ourselves able to agree to any of the findings or 
recommendations of the staff or any resolutions based upon them, 
because they have not the criticism of employers, employees, and 
others affected by them, which we consider indispensable in order 
that we might have before us assurance that they were accurate and 
not chargeable with important omissions. These reasons are stated 
more fully in paragraph 4 following, and are equally appropriate 
for those who refuse to sign this report. We find ourselves unable to 
agree with other recommendations and resolutions for legislation, 
because they contain few or no practicable suggestions for legislation 
that would be enforceable, or because they are directed to making a 
few individuals scapegoats, where what is needed is serious attention 
to the system that produces the demand for scapegoats, and with it 
the breakdown of labor legislation in this country. In this way we 
interpret the act of Congress which requires us to inquire " into the 
scope, methods, and resources of existing bureaus of labor and into 
possible ways of increasing their usefulness." From our personal 
experience we agree with many of the alleged findings and with the 
objects intended to be accomplished by the enactment of proposed 
laws, but we consider that it is not worth while to propose any more 
laws until we have provided methods of investigation, legislation, 
and administration which can make laws enforceable. A law is 
really a law only to the extent that it is enforced, and our statute 
books are encumbered by laws that are conflicting, ambiguous, and 
unenforceable, or partly enforced. Here is probably the greatest 
cause of industrial unrest, for as soon as people lose confidence in 
the making of laws by the legislature, in their interpretation by the 
courts, and in their administration by officials, they take the law into 
their own hands. This is now being done by both employers and em- 
ployees. Before recommending any additional much-needed laws 
affecting wages, hours, child and woman labor, unemployment, or 
other substantive laws to improve industrial conditions, we must call 
attention to the widespread breakdown of existing laws and must 
devise methods of revising them and enacting and enforcing new 
laws so that they will fit actual conditions and be enforceable and en- 
forced. With the widespread demand for more laws to remedy wide- 
spread and well-recognized causes of industrial unrest, there is a 
curious feeling that, if only more laws are placed on the statute 
books, they will, in some unexplained way, get themselves enforced. 



While recognizing the justice of much of this demand for new laws, 
we are not placing them first in our report, but rather the methods 
of investigating conditions, of enacting legislation, of judicial inter- 
pretation, and administrative enforcement necessary to make them 
worth while as a real remedy. 

Other industrial nations have gone far ahead of the United btates 
in adopting labor legislation, much of which is also needed here; 
but their laws are drawn up so as to be enforceable, and their machin- 
ery of enforcement is such that the people are willing to entrust new 
laws to their officials for enforcement. Our Government is different 
from theirs and requires different methods, but, if our methods and 
officials can not be made as effective and trustworthy as theirs, then 
we can not trust more laws than we now have to their hands. 

One of the most important facts to be recognized is that govern- 
ments, whether State or Federal, can not be looked to alone for 
remedying evil conditions. As soon as people come to look upon 
the coercive power of government as the only means of remedying 
abuses, then the struggle for control of government is substituted 
for the private initiative through private associations, from which 
the real substantial improvements must come. We must look for 
the greatest improvement to come through the cooperation with gov- 
ernment of the many voluntary organizations that have sprung up 
to promote their own private interests. The most important ones, 
for our purposes, are employers' associations, labor unions, and farm- 
ers' organizations. These are directly affected by most labor legis- 
lation, and they have much more powerful influence than have unor- 
ganized interests upon legislatures and administrative officials. 

Furthermore, the struggle between capital and labor must be 
looked upon, so far as we can now see, as a permanent struggle no 
matter what legislation is adopted. If this is not recognized, pro- 
posed remedies will miss the actual facts. But there are certain 
points where the interests of capital and labor are harmonious or can 
be made more harmonious. In fact, this field where there is no real 
conflict between employers and employees is much wider than at 
first might be imagined. By recognizing these two facts of perma- 
nent opposition and progressive cooperation, it may be possible to 
devise methods of legislation, court interpretation, and administra- 
tion which will reduce antagonism and promote cooperation. For, 
while we can not look to government alone for remedying abuses, 
it is only by legislation that we can give voluntary organizations a 
greater share in working out their own remedies and in cooperating 
with government toward increasing the points of harmony. 

Some progress has been made in this direction in the past few years 
in some States, through the enactment of laws creating industrial 
commissions, but none of these laws go to the full extent required in 
order to carry out the foregoing principles. By observing the 
strong and weak points of these laws, as well as those of other States 
and the Federal Government which have not adopted similar laws, 
we can draw certain conclusions, which we do in the form of recom- 
mendations. A draft of a bill embodying most of these recommenda- 
tions was submitted to the legislatures of Colorado and New York 
during the legislative sessions of 1915 and w T as adopted with more 
or less serious modifications and additions by those legislatures. The 




recommendations below contain most of the terms of the foregoing 
draft and also of improvements which seem essential to be made in 
the industrial commission laws of the States and of proposed laws 
for State or Federal Governments. Some of the recommendations 
are based on personal experience in the administration of labor laws. 


1. State and Federal industrial commissions to be created for the 
administration of all labor laws. All bureaus or divisions dealing 
with conditions of labor, including industrial safety and sanitation, 
workmen's compensation, employment offices, child labor, industrial 
education, statistics, immigration, and so on, to be placed under the 
direction of the commission. Each commission to consist of three 
commissioners to be appointed by the governor or President, as the 
case may be, with the consent of the Senate. Members to be ap- 
pointed with the advice of the advisory representative council. 
(See par. 2.) The term of each commissioner to be six years, except 
that the terms of the commissioners first appointed shall be so ar- 
ranged that no two shall expire at the same time. The Federal 
Department of Labor to be retained for educational and political pur- 
poses, and a similar department might be created in large industrial 
States, such as New York and Pennsylvania. 

The tendency of labor legislation in the States which have given 
attention to this matter has been toward a complete centralization of 
the administration of the labor laws in the hands of a single depart- 
ment. Wisconsin in 1911 established an industrial commission for 
the administration of all labor laws, and Ohio, after one year of 
separate administration of the compensation law, created in 1913 a 
similar commission, and incorporated the compensation commission 
into an industrial commission. In New York and Pennsylvania the 
responsibility for the administration of labor laws has been divided 
between a commissioner of labor, who is responsible for their en- 
forcement, and an industrial board of five members, the sole duty of 
which is to make necessary rules and regulations having the force of 
law. In New York there has also been a separate commission for the 
administration of the compensation act. The tendency, however, is 
strongly toward the industrial commission plan, as the New York 

Elan, which was devised at the time of the reorganization of the 
ibor department of that State in 1913 and adopted in the same year 
by Pennsylvania in an act largely copied from the New York law, 
has already (1915) been given up in the State of its origin. The 
New York commission under the law of 1915 consists of five members, 
and is charged with the administration of all labor laws and the 
workmen's compensation law, and also with the duty of making the 
rules and regulations for carrying these laws into effect. In Penn- 
sylvania a compensation act has this year (1915) been enacted, and, 
while no change has been made in the organization of the labor de- 
partment, the administration of the compensation act has been in- 
trusted to that department. 

During the present year (1915) at least five States have enacted 
legislation for a closer union of the administration of their labor and 
compensation laws. Colorado, with serious modifications, and In- 
diana have enacted laws creating industrial commissions similar to 


those of Wisconsin and Ohio. Nevada has created an industrial 
commission of three members for the administration of its com- 
pensation act and has conferred upon one of the commissioners, to 
be designated as commissioner of labor, the duty of enforcing all 
laws of the State for the protection of the working classes. In New 
Jersey, after an unsuccessful attempt to create an industrial com- 
mission, provision has been made for two additional employees in 
the department of labor for the purpose of correlating the work of 
that department with the administration of the compensation act. 

In California the industrial accident commission administers the 
compensation act and also laws dealing with safety in places of em- 
ployment, although the labor bureau also has the latter authority; 
and in Massachusetts, while there are still separate boards in charge 
of the labor department and of the administration of the compensa- 
tion law, the two boards sit jointly for the purpose of making rules 
and regulations for the prevention of industrial accidents and occu- 
pational diseases. 

In several States bills have been introduced for the creation of an 
industrial commission for the administration of all such laws. In 
New Jersey such a bill was introduced by the president of the State 
Federation of Labor, who is also a member of the assembly, and in 
Maryland such a bill was prepared and introduced at the instance of 
the State labor department. In Illinois the report of the efficiency 
and economy committee recommended the consolidation of the vari- 
ous departments dealing with labor laws, including the board admin- 
istering the compensation act, and in Missouri a legislative com- 
mittee, after a careful study of the subject, reported in December, 
1914, in favor of the enactment of a compensation law and the crea- 
tion of an industrial commission to administer both it and the other 
labor laws of the State. This latter report is particularly impor- 
tant, because it represents the result of a recent official study of the 
problem and consideration of the experience of the States which 
have advanced labor laws. 

As already explained, the fundamental principle of these recom- 
mendations is that the administration of all the labor laws of a State 
shall be centralized. An illustration of the advantages is found in 
uniting the administration of the labor laws relating to safe and 
sanitary conditions of employment with the administration of the 
workmen's compensation laws. 

It is probably unnecessary at this stage of the development of 
workmen's compensation legislation to consider the question whether 
there should be a responsible officer or officers charged with the ad- 
ministration of such laws, 01* whether their administration should 
be left to individual initiative and the final determination of courts 
of law, already burdened with many other and equally important 
responsibilities. That question is settled, and the only point is as to 
the character of the administrative agency. Both the nature of the 
compensation laws and the experience which has been gained during 
their operation in many States point to a board or commission, in- 
stead of the courts, as the best form of administration. Economy of 
administration then is secured if the administration of safety laws is 
placed in the hands of the compensation commission. Fewer highly 
paid executive officers and other employees are required, and there 



is secured avoidance of duplication in the work itself. For example, 
it is essential to the administration of both these laws that em- 
ployers should be required to make reports of accidents. On the 
one hand they furnish necessary information respecting the na- 
ture of accidents and the possibilities of prevention; on the other, 
they are necessary in the actuarial work involved in the administra- 
tion of compensation. The same is true of the inspections which are 
frequently necessary in the course of the administration of both laws 
and in most instances one inspection would serve both purposes. 
Furthermore, the information derived from hearings in compensa- 
tion is of great assistance to the commissioners, who are also charged 
with responsibility of the labor laws generally, in giving them a 
broader view of the problems with which they are dealing. 

The same kind of events that have led up to the State industrial 
commission are taking place in Federal legislation. Already two 
bills on workmen's compensation have been well advanced and one 
of them creates a commission separate from the Department of La- 
bor. The bill for compensation of employees of the Government 
(63d Cong., 2d sess., H. R. 15222) takes the place of the present law 
administered by the Department of Labor, and provides for a 
"United States Employees' Compensation Commission" consisting 
of three commissioners, no one of whom shall hold any other Federal 
office or position. The other (63d Cong., 1st sess., S. 959), providing 
for employees of private employers in interstate commerce, leaves 
the administration of the law to the courts, a method that has been 
effectually discredited. Whether either or both bills on workmen's 
compensation are adopted, they should be united, as already shown 
in the case of the States, under a commission that administers the 
safety laws. 

When the Department of Labor was created the important work 
of safety for mine workers was left in the Department of Interior 
under the Bureau of Mines. Safety on railroads is in the hands of 
the Interstate Commerce Commission. The Bureau of Standards, of 
the Department of Commerce, develops safety standards for electric 
and other equipment. The Public Health Service, of the Treasury 
Department, investigates industrial diseases and factory sanitation. 
The Bureau of Labor Statistics, of the Department of Labor, in- 
vestigates and publishes bulletins on accidents and diseases in va- 
rious industries. Lately a bill has passed the House providing for 
a safety bureau in the Department of Labor, with power to investi- 
gate any or all of the matters of safety now carried on either in that 
department or in any other department. The seamen's law re- 
cently enacted is in the hands of the Department of Commerce, as- 
sisted by the Department of Labor. The Department of Agriculture 
has a division on rural housing and social conditions. 

This overlapping of jurisdiction in matters of industrial safety 
and sanitation has grown up without any plan, according to the 
accident of such officials as happened to be on the ground or to get 
a hearing in Congress; or on account of objection to placing authority 
in one department or another. And now, with the prospect of Fed- 
eral legislation for compensation for accidents and occupational 
diseases, one or two more bureaus are likely to be created, wdth their 
most important object the prevention of accidents. 


At the same time three great private associations have sprung up 
which are doing as much or more for safety than all the State and 
Federal Governments combined. The Conference Board of National 
Allied Safety Organizations, composed of representatives from the 
National Association of Manufacturers, the National Founders' As- 
sociation, the National Metal Trades Association, and the National 
Electric Light Association, has begun the standardization of safety 
devices for millions of employees, regardless of any standards which 
State or Government officials may set up. 

The National Council of Safety, composed of the safety experts of 
most of the large corporations of the country and of representatives 
of labor, has developed an extensive campaign of accident prevention. 
The Workmen's Compensation Service Bureau, supported by the lia- 
bility-insurance companies, is doing expert work of the highest 
order in safety devices and processes for the assistance of such 
employers as are policy holders in those companies. 

With these three national organizations representing the employ- 
ing interests, with at least five, and the prospect of seven, bureaus 
representing the Federal Government, and with similar agencies more 
or less developed in the States, all of them working on the same prob- 
lem of compensation for accidents and prevention of accidents, the 
time is ripening for some kind of correlation and uniformity. It 
can not be expected that Congress and the people will long be satis- 
fied with this expensive and wasteful disorganization of the national 
energies that are directed to the great work of safety and compen- 
sation. Just as the States are moving toward centralization under 
industrial commissions, so the same problem must force the Federal 
Government toward not only centralization of its own work but cor- 
relation with the States and with private organizations. 

It does not follow that all of the Federal bureaus dealing with 
safety and health should be bodily taken from their several depart- 
ments and transferred to an industrial commission. There may be cases 
where their work on industrial safety and health is tied up with their 
other work. It is only necessary that the several departments should 
be required by law to discontinue any overlapping or conflict of 
jurisdiction, and that an industrial commission should have authority 
to bring them all together into a national council of industrial safety 
and health and require them to agree on a definite plan of dividing 
up the work and cooperating with each other and with private asso- 
ciations organized for similar work. Other comments will be found 
under paragraph 3. 


2. An advisory representative council consisting of the Secretary 
of Commerce and the Secretary of Labor and of, say, 10 employers 
(including farmers) and 10 representatives of labor unions (includ- 
ing women). The representatives on the council to be selected from 
lists, not including lawyers, submitted by recognized employers' asso- 
ciations in the State or in the Nation, as the case may be, such, for 
example, as State associations of manufacturers, the National Metal 
Trades Association, the National Founders' Association, associations 
of coal operators, of railroad presidents, of brewers, of farmers' 



organizations, etc. The representatives of employees to be selected 
from lists submitted by the American Federation of Labor, the rail- 
road brotherhood, the Women's Trade Union League, and independent 
organizations. In all cases either the associations entitled to repre- 
sentation should be named in the law, or provision should be made 
rhereby the governor or President, upon investigation, shall name 
rgaiiizations which are considered representative by organized em- 
ployer's and organized employees themselves and permit them to name 
their representatives. Similar provision in case an organization 
ceases to exist or to be representative. Any organization to be entitled 
to recall its representative on notice. The representative council 
to be appointed by the governor or the President before the appoint- 
ment of the commission and the governor or the President to call it 
together and to consult with it regarding the names proposed to be 
nominated for commissioners. The Industrial Commission to invite 
also a limited number, say, 10, of individuals or representatives of 
organizations including persons especially interested in unorganized 
labor arid representatives of such organizations as the International 
Association for Labor Legislation, the National Child Labor Com- 
mittee, and the Consumers' League and individual employers and 
employees, as may be advisable for their assistance, to be members 
of the advisory council. The council to take no vote on any subject 
except procedure and to have no veto on any act of the Industrial 
Commission. Nominal compensation or no compensation to members, 
with necessary expenses. The representative council to effect its 
own organization and call meetings independent of the commission, 
to be provided with a secretary and needed clerical assistance, to hold 
meetings perhaps quarterly and on call, to keep and publish records 
of its proceedings. The Industrial Commission to be required to 
submit all proposed rules, regulations, and publications to the repre- 
sentative council, allowing sufficient time for examination and dis- 
cussion, and to publish any protest or criticism filed by any member 
of the council, along with the commission's own publication. 

This recommendation is an extension of a principle which is left- 
optional in several State commission laws, but the mandatory feature 
has been partially adopted by law in New York. The recommenda- 
tion creates a body similar to the Superior Councils of Labor in 
France, Belgium, and Italy, the Industrial Council in England, and 
many councils of private representative citizens w T ho assist Govern- 
ment officials in Germany. In Wisconsin the appointment of a 
council is optional with the commission, but it has been appointed 
for several purposes, and this policy has been demonstrated to be the 
most effective of all that the commission has adopted. The omission 
by that commission to adopt it at times has been a source of severe 
and just criticism, and accounts for the granting of permits against 
which objections are rightly made. In New York the representa- 
tive council is mandatory, but the selections are made by the gov- 
ernor, and are therefore liable to be political and nonrepresentative. 
For these reasons it is recommended that the council not only be 
mandatory, as in New York, but that no action of the commission, 
except in case of specified emergencies, shall be valid and no pub- 
lication shall be issued unless previously submitted to the representa- 
tive council. In this respect -the advisory representative council 
38819 16 12 


would have powers in excess of those of similar councils, except per- 
haps the Superior Council of Belgium. 

Appointment by the governor, President, or Industrial Commis- 
sion is required in order that members may receive necessary ex- 
penses. Lawyers are excluded because the council should be com- 
posed of persons with practical experience in industry. 

The history of governmental commissions and departments has 
often been the appointment of men on the recommendation of poli- 
ticians or special interests or the accident of personal acquaintance. 
An executive, in looking around for competent appointees, is often 
at a disadvantage because he can not get impartial and disinterested 
men to accept, or because he does not have impartial and competent 
advice in his selections. To the proposed Industrial Commissions 
is given the most serious problem before the American people. Al- 
most everything turns on the kind of men appointed. They must 
be men not only competent but having the respect of the great op- 
posing interests. Their position is that of a kind of mediator as 
well as of administrator. Such appointments should not be made 
in haste, nor in the secret of the executive's accidental advisors. 
They should be considered publicly, and especially by the opposing 
interests whose fortunes will be committed in great part to their 
hands. The governor or President can not, of course, be bound by 
the action of the council, but he can be required to get their advice 
on names proposed. 

It is intended that the members of the commission itself should 
not be representative of either employers or employees, but that they 
should have the confidence of both sides. This is expected to follow 
from the requirement that the governor or President should consult 
the council before making his nominations of commissioners. In 
this way, what is known as "the public" would be represented in 
part by the commission, while capital and labor would be represented 
in the council. 

By this method it can be expected that capable men may be at- 
tracted from their private occupations into public service as mem- 
bers of the commission. Usually the kind of men required for such 
positions dread the political and personal attacks that are connected 
with public office. But it would be difficult for an eminent man to 
resist the call to public office when he has the united invitation of 
the President, the employers, and the labor unions of the country. 

The representative council has no veto power, but is intended 
merely as a cooperative body representing employers, employees, the 
public as it is represented by the Secretaries of Commerce and Labor, 
and individuals selected by the commission. Its duties are purely 
advisory. Its purpose is not only to give the governor or President 
and the commission the benefit of advice and to bring together for 
conference representative labor men and employees, but to guarantee 
as far as possible that all appointments (par. 3), all investigations 
and publications (par. 4), all rules and regulations (par. 5), and 
other acts of the commission, shall, before they are published or be- 
come valid, be under the continuous supervision of the recognized 
leaders of organized capital and organized labor, and public repre- 

No requirement is made for the appointment of advisory experts, 
such as lawyers, engineers, and physicians. These may be appointed 



by the Industrial Commission as members of the third interest on 
the council, but it is found in practice that the services of consulting 
experts are secured without expense to the State if representative 
employers and employees have a part in the advisory council. This 
is attended to because the employer and employee representatives 
themselves have not the technical knowledge and can not give the 
time necessary to consider all details, but must consult experts in 
whom they have confidence. This they do, and are thereby prepared 
to discuss intelligently the acts of the commission. The council and 
the commission can, of course, call in such experts to thefr con- 
ferences at any time. 

The employer and employee members of the advisory council 
should be strictly representative and responsible to the organizations 
represented. For this reason the organizations and not the Govern- 
ment should pay the salaries of the members. The result as shown in 
Wisconsin, where not even expenses are paid, is that the represen- 
tatives are usually business agents of the unions and large employers 
selected by the employers' associations. 

The council should organize with its own officers, independent of- 
the commission, but should hold its conferences with members of the 
commission or with members of the staff. It should appoint expert 
advisory committees as needed for different subjects, such as safety, 
employment offices, etc. It should be provided with clerical and 
other help from the staff of the commission. 

Since the powers of the council are only advisory it is not essential 
that it should vote on any questions except procedure. Hence it is 
not necessary to have equal representation of any interests or full 
attendance at all meetings. Each member should be furnished by 
mail with all proposals and proposed publications of the industrial 

For the reasons just cited it is not necessary that the commission 
itself should consist of more than three members. They are not 
expected in the larger States or in the Federal Government to attend 
to details of administration. Their duties will be mainly those of 
consultation and conferences with the council, supervision of the 
executive heads of divisions (par. 3), and public hearings. 
. This advisory council provides effective publicity for every act of 
the commission. The ordinary publicity required by law is that of a 
public hearing, and is limited to rules and regulations which are to 
have the effect of law. Such public hearings have become mere legal 
formalities, at which usually lawyers appear for each side and little 
or no opportunity is given for the two sides to get together on points 
where they can agree. The commission then retires and issues such 
rules and regulations as it may choose. These formal public hearings - 
are not even required by law in some cases, but (par. 5) the recom- 
mendation provides that before the public hearing the employers 
and employees, with the commission and its staff, shall have con- 
sidered and drafted the proposed rules so that when it comes to the 
public hearing they are present to explain and defend them. If 
objections are raised at the public hearing the proposed rules are 
referred back to the advisory council and the staff of the commission 
for reconsideration before being finally approved and issued as the 
legal act of the commission. If no public hearing is required by law, 
rules can not be issued except on advice of the representative council. 


In this way an effective publicity is secured by a thorough considera- 
tion of the rules, because both those who are to be compelled by law to 
obey the rules and those in whose interest they are issued have 
assisted in drafting them. 

Additional comments will be found under paragraph 3. 


3. The commission to appoint a secretary, bureau chiefs, or chiefs 
of divisions, and such other employees as may be necessary, all of 
them to be under civil-service rules. Provision to be made for the 
advisory representative council or a committee named by it, repre- 
senting both employers and employees, to assist the civil service com- 
mission in conducting examinations, except for clerical positions, 
and making it mandatory 011 the civil service commission to appoint 
these representatives on its examining boards. Members of advisory 
council while serving on such boards to receive extra compensation. 
If there is no civil service commission in the State, then the advisory 
council shall cooperate with the industrial commission in the exami- 
nations. The commission afterwards to make its appointments from 
the eligible list of those who pass the examinations. A graded system 
of salaries and promotions to be adopted, by which the members of 
the staff may rise to the position of heads of bureaus or divisions, 
where they would receive salaries equivalent, if necessary, to those 
received by the commissioners. Any proposed removal of subordi- 
nates to be brought before the advisory council before action. 

Many of the features of this section are adopted in the New York 
act, but the examination by employers and employees is not manda- 
tory on the Civil Service Commission, and a few of the chief posi- 
tions are exempt from civil-service, rules. The Civil Service and 
Industrial Commissions of Wisconsin have practiced this method of 
examination and appointment for employment offices and for chiefs 
of divisions, although not required by law. 

Objection sometimes is made to civil-service examinations as being 
impractical and theoretical. Indeed, civil-service examinations are 
likely to be impractical if conducted by experts. These objections 
can be avoided in the examinations for these positions by requiring 
that the Civil Service Commission, if there is one, shall cooperate 
with the representative council. The examinations would thus be 
conducted with the aid of men thoroughly acquainted with all the 
practical difficulties involved in the duties of the positions to be filled. 
By making use of oral or written, assembled or nonassembled, com- 
petitive or noncompetitive examinations, as best suited to the partic- 
ular purposes, it should be possible to obtain all the advantages of 
the civil-service system with few of its disadvantages. 

Furthermore, it is not enough that examinations for positions 
under the Industrial Commission should secure efficiency and per- 
manency; it is even more important that they should secure impar- 
tiality. The Industrial Commission itself and its entire staff are 
looked upon as mediators in adjusting the administration of labor 
laws to the actual conditions of industry. It is essential that both 
sides should have confidence in the staff of the commission, and there- 
fore that both sides should have a voice in its selection. 


This provision for representatives of employers and employees on 
examining boards should not be left optional with Civil Service Com- 
missions or the Industrial Commission, but should be mandatory. 
It has been found that several Civil Service Commissions object to 
this provision, because they wish to retain unqualified authority for 
conducting examinations and making up eligible lists. This is one 
of the features of bureaucracy which should not be permitted where 
such vital issues as the contest between capital and labor are at stake. 
The provision in the recommendation does not prevent Civil Service 
Commissions from appointing experts on their examining boards; 
it merely requires them also to appoint, in addition, the recognized 
representatives of the interests who have previously been nominated 
by the interests themselves. 

At the present time secretaries and bureau chiefs in the Federal 
Government are exempt from civil-service rules, and are usually 
appointed by the President and confirmed by the Senate. This is a 
serious discouragement to competent subordinates, who are thereby 
prevented from rising by promotion to the higher positions in their 
bureaus, and who see less competent political appointees brought in 
over their heads as well as frequently changed. 

These recommendations are intended to place the highest positions 
under the Industrial Commission on an equivalent with the com- 
missioners themselves. It would be unfortunate and impracticable, 
except in smaller States, if the commissioners were required to give 
their entire time to the details of administration. This is the case 
where a commission must perform as many functions as are required 
in the large State and Federal Government commissions. This they 
would be compelled to do if their chiefs of divisions were frequently 
changed, as under the present system. The chiefs of divisions and 
bureaus, both under Federal and under State commissions, should 
be as competent as the commissioners to deal with employers and em- 
ployees, and much more competent in dealing with subordinates. In 
foreign countries the office of factory inspector, as well as all other 
offices dealing with the relations of employers and employees, are 
considered as professions. In some of those countries the universities 
provide training courses and lectures on the subjects for which the 
officials are preparing, and these are required to be taken as a part 
of the civil-service rules. The appointee then serves as an appren- 
tice in the department and by promotion may reach the highest po- 
sition. As a result a high grade of inspector is obtained. Only when 
the officers and employees of the commissions have such opportunities 
as these for a life work, provided they are impartial as between em- 
ployers and employees, can officials be interested in preparing them- 
selves for the work, or academies like those at West Point and 
Annapolis be adopted for the training of civil servants. 

The advisory representative council, proposed in paragraph 2, 
also protects the administration of labor laws from the just fear of 
government by a bureaucracy. There must be officials if labor laws 
are to be enforced. The courts can not be relied upon alone, because 
prosecution can be begun only by private individuals. Consequently 
administrative officers and inspectors have been provided to initiate 
prosecutions. These officials constitute a necessary bureaucracy, if 
the laws are enforced. But it can not be asserted that the present 


system of political appointments of inspectors avoids the evil of 
bureaucracy. The essential evil of bureaucracy is not so-called per- 
manency of tenure, but the refusal of the official to take advice from 
laymen. The loudest agitator against bureaucracy becomes at once 
the most confirmed bureaucrat when he gets into office, because he 
determines to run his office in his own way, regardless of the advice 
of those who are compelled to obey his orders. In this sense the 
American officeholder is much more of a bureaucrat than are the 
European officials, who are compelled to consult the superior councils 
of labor or industrial councils of representatives of interests. It is 
for this reason that the legislatures and Congress should make it 
mandatory that the representative advisory councils should be 
created and that the industrial commissions and their staffs should 
confer with them before any act of the commission can have the 
validity of law. It is also necessary that the Civil Service Com- 
mission should appoint representatives from the council on its 
examining boards before any valid eligible list for appointment of 
subordinates can be made. 

Another charge against civil-service rilles is the objection to per- 
manency of tenure and the inability to get rid of an official who 
adheres to outworn methods. This objection often has force, but the 
remedy is not that of returning to political and partisan appoint- 
ments or frequent removals when changes occur in the political 
branch of Government. Officials, under most civil-service laws, can 
be removed at any time, provided reasons be given and no civil 
service commission should have authority to reinstate any official, as 
is the mistaken policy of some States. Permanency of tenure means 
only permanency on "good behavior." The principal reason why 
officials adhere to old methods is because there is no continuous 
supervising authority in a position to force them into new and better 
methods. The provision for an advisory council with which the 
officials are compelled to confer has been found to be the most effec- 
tive method of compelling such officials to keep up with the changing 
conditions that require new methods. If, then, they are obstructive 
or incompetent to do this, there is good cause for removal. 


There are, of course, criticisms and objections raised against indus- 
trial and other commissions. It is not claimed here that they always 
work well. But they work better than the system they have dis- 
placed, and they have been found to be the only alternative where 
legislation attempts to regulate the relations of great conflicting and 
hostile interests. Many States and Congress have been forced by 
actual conditions to create railroad and interstate commerce com- 
missions in order to take the details of the contest between railroads 
and shippers as far as possible out of the legislatures and the courts. 
Congress has been compelled, after 25 years of futile antitrust 
legislation, to turn over the contest between trusts and their com- 
petitors or customers, to a Federal trade commission. The contest 
between^ban kers and the commercial and business classes that depend 
on credit for their existence has been turned over to the Federal 
Reserve Board. 


The contest between capital and labor is more serious than any 
of the other contests. Since the year 1877 it has frequently resulted 
practically in civil war, with the army or militia called in to sup- 
press one side or the other, according to the will of the executive. 
It is claimed by some that this contest is irrepressible and will end 
in revolution, and at least it is plain, when the military power is 
called upon to decide a contest, that the ordinary machinery of 
government, which is fairly successful in other contests, has broken 

It is not a solution of the contest to claim that these outbreaks 
are caused solely by agitators and have no foundation in conditions 
that need remedying. Such a solution, carried to its limit, means 
the suppression of free speech, free press, and free assembly, which 
can be accomplished only by military power. That there are con- 
ditions which need remedying is shown by the enormous amount of 
labor legislation of the past three decades, and the enormous amount 
cf new legislation proposed. This legislation has come from the 
free discussion and investigation of actual labor conditions, and if 
there is no effective way for this discussion to be carried on and the 
alleged facts to be verified or disproved, then the result must be an 
excess of unfounded and impractical agitation mixed up with real 
grievances. There are unbridled agitators of this kind on both sides 
of the contest, and it is only when the two sides are brought together, 
and their charges, countercharges, and alleged grievances are boiled 
down by investigation to the residuum of facts, that mere unfounded 
agitation can be expected to give way to deliberations on remedies for 
recognized evils. 

This does not mean that both sides can be made to agree on 
remedies for all evils and grievances, even after they have agreed 
on the facts. It means only that there is found to be a much larger 
field than was supposed where they can agree, and it is worth while 
for legislation to provide the means for bringing both sides together 
for a continuous search after the common points of agreement. When 
they have agreed upon and disposed of less disputatious points, they 
are in a position to go on to those disputed points which had been 
thought irreconcilable. This is the main reason for creating Indus- 
trial Commissions with adequate powers of impartial investigation, 
with conferences and discussions by both sides, and with power to 
decide on regulations and then to enforce them. (Par. 5.) 

While some of the functions outlined for the proposed Industrial 
Commission are now being performed by the Department of Labor 
through its bureaus, it is not proposed that the department be 
abolished. (Par. 1.) It is even proposed that in large industrial 
States a similar department might be created in addition to the In- 
dustrial Commission. In nonindustrial States, where the labor de- 
partment is mainly educational and not administrative, there would, 
of course, be no occasion for an Industrial Commission. Such occa- 
sion would usually first arise in case a workmen's compensation law 
were enacted. 

We take it to be commonly accepted that a department, with its 
head having a seat in the Cabinet, is chiefly designed to advise and 
aid the administration in formulating its policy toward the interests 
in charge of that department, and to foster and promote the welfare 


of those interests. To be sure, other responsibilities are intrusted 
to the department, but the foregoing are its prime duties. 

That Congress intended it to be so is manifested in the statutes 
creating the different departments. Thus the law establishing the 
Department of Commerce declares that it should foster, promote, and 
develop the foreign and domestic commerce, the mining, manufac- 
turing, shipping, and fishery industries, and the transportation facili- 
ties of the United States. Likewise in creating the Department of 
Labor in 1885, Congress stated its purpose to be the diffusion of 
" useful information on subjects connected with labor, in the most 
general and comprehensive sense of that word, arid especially upon 
its relation to capital, the hours of labor, the earnings of laboring 
men and women, and the means of promoting their material, social, 
intellectual, and moral prosperity." Congress reiterated its position 
when it raised the Department of Labor to Cabinet rank in declar- 
ing that its purpose should be "to foster, promote, and develop the 
welfare of the wage earners of the United States, to improve their 
working conditions, and to advance their opportunities for profitable 
employment." It is also mandatory upon the Secretary "to make 
such special investigations and reports as he may be required to do 
by the President, or by Congress, or which he himself may deem 

Congress has not only declared that it regards Cabinet officers or 
department heads as the personal choice of the President, whom 
they are to assist in formulating his executive policy, but it has also 
accepted it in practice. This is illustrated by the fact that the Senate, 
even when controlled by an opposition party, usually ratifies the 
President's nominations promptly and without objections. 

When influential economic groups feel that the Government can be 
of assistance in promoting their interests, they set about to bring 
political pressure to bear upon Congress to create a department 
that will concern itself with their welfare. Thus the Department 
of Agriculture was created in 1880, largely through the efforts of 
the National Grange and other farmers' organizations. In the same 
way the Department of Commerce was created on the petition of the 
business and manufacturing interests. 

Of course, the different departments have also been intrusted with 
administrative duties. The Department of Agriculture administers 
the meat-inspection service, the Department of Commerce the steam- 
ship-inspection service, the Department of Labor the immigration 
service, and so on. However, whenever an acute administrative 
problem arises, owing to an intense conflict between two opposing 
economic interests, and requiring a disinterested enforcement of law, 
it has usually not been intrusted to one of these political depart- 
ments. Hence, when Congress turned its attention to the dispute 
between the railroads and the great majority of shippers, it did not 
create a Department of Commerce to administer the law, but instead 
intrusted it to the Interstate Commerce Commission, a disinterested 
and nonpolitical body. Again, when Congress determined upon 
legislation to deal with " the new economic problem involved in the 
increased tendency toward concentrated ownership of the large in- 
dustries of the country," no one even thought of suggesting that this 
mutter be turned over to the Department of Commerce. On the con- 
trary, without a single objection, an independent administrative com- 



mission, the Federal Trade Commission, was created to enforce the 
legislation. The same is true with the Federal Reserve Board. Con- 
gress has also applied this policy to the labor problem. The first 
important administrative act directly affecting capital and labor was 
not assigned to the Department of Labor for execution, but to a dis- 
interested and nonpolitical board. We refer to the Newlands Act of 
1913, and preceding acts relating to arbitration of labor disputes on 
railroads. When an effort was made to place the administration of 
this act under the Department of Labor, both the railroad companies 
and the railroad brotherhoods opposed and prevented the change. 

We are of the opinion that if, in dealing with the labor problem, 
this policy is carried out consistently, considerable of the industrial 
unrest will be allayed. We believe that it should be the conscious 
policy of Congress to separate the policy-determining functions from 
the administrative functions. The Department of Labor should be 
intrusted with investigations that would aid the President and his 
administration in determining upon a labor policy. It should also 
be the educational medium through which the country is to be in- 
formed on the various labor issues that need solution or have not yet 
been legislated upon. As a matter of fact, this has been the depart- 
ment's chief and most effective activity. A glance at the list. of pub- 
lications of the department shows the influence it has had as a pioneer 
in labor legislation in this country. The present unanimity of 
opinion in favor of workmen's compensation, safety and sanitation, 
vocational training and employment bureaus, is largely due to its 
having concentrated upon educating the public to the need of such 
legislation. And the department wisely continues to fulfill its chief 
mission by pointing the way to future improvement of the conditions 
of labor. Its recent publications aim to enlighten and crystallize 
public opinion on such mooted but vital questions as sickness and unem- 
ployment insurance, old-age pensions, housing of workingmen, coopera- 
tion, employers' welfare work, home and factory conditions of women 
and children. To make its work still more effective the department 
has begun issuing a monthly review which will supply information 
on all questions affecting labor. We have no doubt that with the aid 
of the Department of Labor, legislation upon these subjects will be 
secured sooner than otherwise. 

On the other hand, when public opinion, through legislation, has 
determined upon a policy, it is vital to its success that it be adminis- 
tered by disinterested persons not connected with a political depart- 
ment. This is necessary in order to obtain the mutual and voluntary 
cooperation of employers and employees, and, unless they are assured 
of a disinterested administration of the law, they will be reluctant to 
assist in its successful enforcement. Naturally a department which 
initiates and advocates new legislation is bound to antagonize those 
who are not in accord with its views. It is futile to expect the De- 
partment of Labor to get the good will and cooperation of those 
whom it successfully defeated in the legislative battle. We must re- 
member that the department is constantly advocating new legislation, 
even while it is administering that which has been enacted. Thus 
the bitter feeling against it is bound to be permanently at high pitch, 
and those who differ from it would likely have no confidence in its 
being able to administer the law disinterestedly. Then, too, as we 
shall show, if a law is administered through a political department, 


its efficient administration may be subordinated to political ex- 

It is in order to avoid these difficulties that we recommend the 
method already adopted in several States. We believe that an 
Industrial Commission, removed from the heat of political con- 
troversy, created with the safeguards proposed herein, would have 
the confidence of employers and employees. Although employers 
and employees may have hopelessly divergent opinions on policy, yet 
when the policy is once determined upon by Congress they are equally 
concerned in its efficient and disinterested administration. If assured 
of this, they cooperate in its successful enforcement. 

Furthermore, much opposition to labor legislation, both by capital 
and labor, is based upon the fear that its administration will be 
partial. And even when such legislation is enacted, unless both sides 
have confidence in the disinterestedness of the administrators, it is 
doomed to remain a dead letter on the statute books. 

In recommending that tl^e policy-determining function be sepa- 
rated from the administrative function, we wish to separate, as much 
as possible, the problems upon which capital and labor disagree from 
those in which they have a common interest. Legislation is a matter 
of opinion. Men may honestly differ as to the wisdom of a certain 
law. Difference of opinion when strongly contested invariably en- 
genders suspicion and distrust. Hence, if an Industrial Commission 
were called upon to initiate and advocate new legislation it would 
be forced to antagonize and lose the good will of either capital or 
labor, or of both. Such an outcome must inevitably hamper its ad- 
ministrative duties, which it can not carry out successfully unless it 
has the confidence of both sides. 

But it is highly essential that the conditions of labor be constantly 
improved and adjusted to new industrial developments. This func- 
tion of studying and promulgating the best policies for promoting 
the welfare of labor should be left to the Department of Labor, as 
originally intended when created. The future interest of our country 
demands that a department devote itself exclusively to the further- 
ance of the welfare of labor. New problems must constantly be 
studied, information furnished, and remedies suggested. Consider- 
ing that in the final analysis public opinion, as expressed through 
legislation, determines the nature of the remedy, it is proper that a 
political department be intrusted with the duty of aiding in deter- 
mining that policy. It is with this idea in mind that we make the 
distinction between the enactment of law which is political in its 
nature and must be fought out in the Congress and in the Cabinet 
and the administration law which is nonpolitical and should be ad- 
ministered by disinterested parties in cooperation with representa- 
tives of capital and labor. 

The conclusion is that all subjects upon which Congress has not 
legislated so as to require an administrative department should be in 
the hands of the Department of Labor. Among these are the impor- 
tant subjects of sickness insurance, invalidity insurance, unemploy- 
ment insurance, old-age pensions, occupational disease, child and 
woman labor, and so on. The department should make studies of 
comparative administration of labor law and the administration of 
laws in the States. Other subjects might be mentioned. In fact 
there should be no limitation on its field of investigation and the 


education of the public to the- evils which labor suffers and the reme- 
dies that should be adopted. 

The Industrial Commission is purely an administrative body not 
intended to promote new legislation, except where it is needed in 
connection with its administration of existing laws. Other new 
legislation gets its initiative elsewhere. The proper place for oppos- 
ing interests to make their fight on new laws is in the State legisla- 
tures and in Congress. Each side necessarily endeavors to elect its 
representatives, to employ its lobby, and to use every honorable 
method in its power to defeat the other side. The outcome is usually 
a compromise not wholly satisfactory to either. But it does not 
follow that the fight should be kept up in. the administration of the 
laws that are enacted. Whatever they are, they should be enforced 
exactly as they stand, and neither side should control the executive 
and administrative officers. These should be impartial. It is because 
executive officials are mainly partisans that the administration of 
labor laws in this country has broken down. They may be appointed 
by political parties, but back of the politicians are the employers or 
the trade-unions that make secret or open deals with the politicians 
in order to control the offices. It can not be expected that employers 
will readily accept investigation or obey the orders of officials whom 
they know or suspect to be agents of unions or of politicians, intent 
on strengthening unionism or making political capital out of their 
positions. It is natural that employers should protect themselves 
either by getting their own agents into the positions or by getting a 
weak and inefficient trade-unionist appointed. In any case the laws 
are not enforced, and the laboring classes in turn become desperate 
and defiant of Government. An illustration is found in the recent 
industrial troubles in Colorado. Probably no State of its size in 
the Union has had upon its statute books more labor laws than Colo- 
rado, nor more trade-union representatives in office to enforce them, 
yet the nonenforcement of the labor laws was undoubtedly one of the 
contributing causes of the recent troubles. The history of many 
other States is similar, so far as nonenforcement is concerned. Labor 
representatives alternate with employer representatives or with 
labor politicians, who make a show of enforcing the laws while the 
masses of labor get no substantial benefit. 

American experience has shown that this situation can be met only 
by a nonpartisan commission, removed as far as possible from poli- 
tics. In other countries, and in British colonies having parliamen- 
tary forms of government, this kind of separate commission is not 
required, for the good reason that the Cabinet officer who enforces the 
labor laws is a member of Parliament, and Parliament must be dis- 
solved and a new election ordered if the Cabinet loses control. Hav- 
ing a seat on the floor of the legislature he must answer questions 
put by the opposition. If one of his subordinates is inefficient or 
takes sides against employers or unions, some one in Parliament is 
liable to rise and demand explanations, and the Cabinet minister is 
compelled to explain and to stand by the subordinate or to repudiate 
him. The opposition may even be able to defeat the ministry and 
get a new election. Consequently, Cabinet officers are responsible to 
Parliament, and, although they are partisans and politicians, they 
are careful that their subordinates, who actually administer the laws, 
shall be impartial and efficient. In no other country, governed by a 


parliament, would such important boards as the Interstate Com- 
merce Commission, the Federal Trade Commission, the Federal 
Reserve Board, or the State railroad and public utility commissions, 
be taken out from under the jurisdiction of a responsible cabinet 
minister. In this country it is found necessary to make them wholly 
or partly independent, because there is no officer directly responsible 
to the legislature or the people who can be given control over them. 

The same is true of the labor departments of parliamentary coun- 
tries compared with such departments in the American State and 
Federal Governments. The issues in this country are too vital and 
menacing, they are too easily turned into political capital, and, at 
the same time, the politicians in charge are too little responsible to 
the legislatures, to Congress, and to the voters, for the American 
people to leave them in the hands of partisan or political officials. 
The plan of an industrial commission with a representative council 
as herein recommended, is based on American experience and fitted 
to American conditions in dealing with such issues of opposing 

But the commissions created to deal with the relations between 
other opposing interests can not be accepted as models for dealing 
with the opposing interests of capital and labor. The Interstate 
Commerce Commission was designed to reconcile the opposing in- 
terests of railroads and shippers, the Federal Trade Commission of 
monopolies and competitors, the Federal Reserve Board of bankers 
and borrowers, but in none of these ca-ses were the opposing interests 
strongly organized for aggression and occasional paralysis of busi- 
ness verging on civil war. It was not so necessary then that the 
opposing sides should be strongly represented, as is recommended in 
the creation of the Advisory Representative Council. This council is 
a kind of parliament designed to hold the commission continuously 
to the impartial performance of its duties and the accuracy of inves- 
tigations upon which the impartial performance of duties depends. 

The Industrial Commission, as here proposed, adopts methods in 
the field of labor laws similar to those that collective bargaining 
between unions and emphwers adopts in drawing up voluntary joint 
agreements. Modern trade agreements are, in fact, almost complete 
codes of labor law for a particular industry, and, if voluntary col- 
lective bargaining could become universal and effective for all em- 
ployers and employees, then the State or Government might not need 
to enact many labor laws. Something like this is actually attempted 
in those countries having compulsory arbitration. They provide 
easy methods for organizing and perpetuating unions of employers 
and unions of employees. They try to induce the representatives 
of these unions voluntarily to recognize each other, to get together 
to investigate grievances and demands, to confer and to draw up and 
enforce a joint agreement covering all alleged evils and grievances. 
If they can not succeed in doing this they provide a court of arbitra- 
tion with substantially all the powers that the conferees of the unions 
and employers would have, if they acted without compulsion. 

But compulsory arbitration is too remote to be considered, or even 
anything which would logically lead to compulsory arbitration. In 
paragraph 14 we recommend voluntary collective bargaining with 
the Government acting only as mediator without any compulsory 
powers. Our alternative proposed for compulsory arbitration is in 



part an industrial commission with a council of employers and 

The need of an industrial commission becomes more pressing in 
proportion as new laws are enacted and new executive duties are 
added. It was the introduction of workmen's compensation that 
forced attention to the situation. Here is a new type of legislation 
which is so evidently a matter in which employers are as much con- 
cerned as employees that it was not considered proper to intrust its 
administration to a department controlled solely in the interests of 
labor. Consequently separate commissions were created independent 
of the labor bureau, or else the compensation law was put in charge 
f the courts. 

-But the most important effect of the compensation laws is not the 
compensation to workmen, for no law pretends to pay the workman 
anything for his suffering nor even to pay him his total loss in wages. 
The most important effect is the universal pressure on employers to 
prevent accidents and to heal the injury as soon as possible. 

Wherever this object of the law was understood either the work 
of factory inspection for accident prevention was taken from the 
labor bureau or the compensation commission and the labor bureau 
were consolidated. One reason for doing this is that employers have 
become as much interested in accident prevention as have workmen, 
for it becomes a matter of business and profits. Another reason is 
that the compensation commission itself may not be tempted to exalt 
the less important object of compensation over the more important 
one of accident prevention and speedy cure. 

The employers now become just as much concerned as the employ- 
ees in having an efficient factory inspection. They must do their 
own inspection, anyhow, for the sake of reducing tlie costs of com- 
pensation, and they do not need to be prosecuted as they did before. 
What they need in factory inspection is the help of inspectors who 
are expert in showing them how to prevent accidents and how to 
organize safety committees and to get the "safety habit" into their 
employees. Whatever reason may formerly have existed for trade- 
unions to get their members appointed as factory inspectors in order 
to drive home prosecutions no longer exists. Neither do employ- 
ers any longer have reason for using political or underhanded 
methods in order to get weak and inefficient inspectors appointed. 
Employers now wish to cooperate with factory inspectors, and the 
only kind they can cooperate with are those who are impartial and 
efficient. The fact that employers have taken the lead in their three 
great safety organizations mentioned under paragraph 1, instead of 
being led by State and Federal labor officials, shows unmistakably 
the need of enlisting employers in at least this branch of labor law. 

Another subject, unemployment, the most serious and distressing 
of all, is almost universally agreed as needing a comprehensive plan 
of employment offices. It is now generally admitted that it must be 
dealt with by the Federal Government. Both England and Germany 
have national systems of public employment offices. The English 
system is operated directly by the National Government; the German 
system is operated by the city and State governments correlated 
and supervised by the Federal Government. A combination of both 
methods will, perhaps, be necessary in this country. Bills have al- 


ready been introduced in Congress, and the Department of Labor 
has begun the establishment of offices. But, in the contest between 
employers and trade-unions, the control of employment offices is 
essential to either side. The antiunion employers' associations already 
have sufficient employment offices, and many local trade-unions have 
employment agencies of their own. 

Employers control the jobs. They hire whom they please. Surely 
they can" not be expected to hire workmen sent to them by trade- 
unionists or politicians who happen to run the public employment 
offices. This accounts for the inefficiency of the offices in almost 
every place where they have been tried. They sink to the level of 
charity, finding occasional short jobs for casuals, but do not become 
the great labor exchanges which they should be as the first step in 
dealing with the most serious of all problems, unemployment. Ex- 
perience shows that employers must have confidence in the ability 
and impartiality of the officials who run the employment offices or 
they will not patronize them. On the other hand, trade-unionists 
must have confidence that the offices will not be used to furnish 
strike breakers. The only effective solution of this predicament is 
the management of these offices by joint committees of organized em- 
ployers and organized employees and their joint civil-service exami- 
nation of the officials who run the offices. Under the Industrial Com- 
mission plan there are not only representative councils at the na- 
tional headquarters, but similar councils for each State and for each 
local office. 

Furthermore, no Federal legislation is more urgent than the su- 
pervision of private commercial offices doing an interstate business. 
If this country expects to promote public offices and to regulate pri- 
vate offices, the only effective way is through joint control by the 
acknowledged representatives of organized employers and employees, 
cooperating with a Federal commission that is impartial and non- 

The subject of industrial education is vital to the Nation as a 
whole and immediately critical for both employers and employees. 
Yet, when a bill is introduced in Congress for national aid to in- 
dustrial education, the administration is not placed under the De- 
partment of Labor, where it would naturally belong and where more 
has been done than in all other departments in the investigation of 
the subject. It is proposed to place the administration under an ex 
officio board of cabinet officers with an officer of the Bureau of Edu- 
cation acting as executive. Furthermore, no standards of efficiency 
are imposed upon the States as a condition of receiving the funds 
appropriated out of the Federal Treasury. (Par. 17.) This bill com- 
bines the features of political control, " pork-barrel " finance, and ex- 
clusion of the two great interests of employers and employees who 
are most directly concerned. The reasons for such recommendations 
are the popular demand for industrial education, and the lack of 
any effective method of bringing together the representatives of em- 
ployers (including farmers) and employees. Such representatives 
are the ones who know the needs of industry and agriculture and are 
competent, with the aid of qualified educators, provided neither side 
dominates the other, to set up the standards of efficient industrial 
training which should be made the essential condition of receiving 
Federal aid. For this purpose the Industrial Commission should 


add to its advisory council representatives of organizations of edu- 
cators, such as the National Education Association, and the Na- 
tional Society for Promotion of Industrial Education. The Federal 
Industrial Commission, upon the advice of such a council, includ- 
ing employers, employees, farmers, and educators, could then de- 
termine the standards as a basis for receiving subsidies, which 
should probably require the States to provide governing boards of 
employers, employees, farmers, and educators, continuation day 
schools with compulsory attendance on the employer's time, adequate 
training of teachers with practical industrial experience, and so on. 

In making the preceding three recommendations no reflection is 
intended on any particular State or Federal official now charged 
with the administration of labor laws. It is conceded, that many of 
them may be doing the best work possible under existing laws. But 
it is recognized that the conditions under which they work make it 
impossible either to administer existing laws effectively or to assume 
the administration of additional laws urgently required to meet the 
increasingly difficult and complex problems of capital and labor. 

Instead of interfering with the commendable work of trade-unions 
the recommendations are intended to strengthen unionism at its 
weakest point. One of the most serious obstacles in the way of a 
harmonious labor movement is the struggle of ambitious unionists 
to get the indorsement and control of their unions for political posi- 
tions. The conflicts within unions for such indorsement and support 
are notorious in weakening the unions. Furthermore, in order to get 
and hold a political position the unionist must make alliance or 
connivance with and concessions to the leaders of political parties, 
and therefore is not free to support consistently the demands of 
labor. He must also often support or even appoint other politicians 
whose influence is used against the unions. This unquestionably 
weakens or destroys the confidence of laborers generally in the in- 
tegrity and faithfulness of all their leaders who accept political posi- 
tions, or are suspected of trying to get such positions. It is only 
when the union representative is paid from his union treasury in- 
stead of the public treasury, and is recalled by his union, that he is 
truly representative and the union itself has a sound basis for per- 
manency and growth. 

Our recommendations adopt this principle and counteract this 
weakness of unionism by making their representatives on the ad- 
visory council dependent solely on the unions. They receive no 
salaries from the public treasury, and can be recalled at any time 
when they cease to be representative. The result is that the unions 
usually nominate for such positions their regular officers or business 
agents who receive salaries from the union treasury for other pur- 
poses. Under such circumstances there can ordinarily be no question 
of the union representatives " selling out " to employers or politicians. 


4. The Industrial Commissions to make and publish investigations 
and recommendations on all subjects whose administration is in- 
trusted to them. Investigations and recommendations on other sub- 
jects to be made only on the request of the legislature, Congress, or 
the court. (Pars. 12, 13.) Since it is provided (par. 14) that the 


Federal and State commissions shall cooperate in the mediation of 
labor disputes, the Federal commission should be the agency to 
which the States should look for continuous investigations and pub- 
lications for the entire country of wages, hours of labor, cost of 
living, joint trade agreements, and all subjects involved in labor dis- 
putes, but the names of establishments or individuals should be kept 
confidential. It should publish, at least annually, a report on all 
strikes, lockouts, boycotts, blacklists, that have terminated during the 
year, but should not make such investigations during an industrial 
dispute unless consented to by both parties in the manner elsewhere 
provided. (Par. 14.) In making such reports it should give all 
material facts, including demands, negotiations, picketing, strike- 
breakers, conciliation, the acts of State or Federal authorities, as 
well as joint agreements reached with or without cessation of busi- 
ness. In preparing these reports the commission should not call upon 
any mediator, but should, if necessary, use its powers of compulsory 

In order to assist State minimum-wage commissions in the most 
difficult part of their work the Federal commission should also in- 
vestigate and report upon interstate competition and the effect of 
minimum-wage laws. Such investigations are of assistance also in 
determining other questions. State commissions should make reports 
on safety, compensation for accidents, minimum- wage investigations, 
employment offices, child labor, etc. 

No publication of any investigations to be made or any rules (par. 
5) to be issued without previously submitting them to all members of 
the representative advisory council, with opportunity for criticism, 
the latter to be published by the commission with its own report. 
All forms, schedules, and instructions for investigators likewise to 
be submitted to the advisory council. 

These recommendations regarding investigations are the most im- 
portant of all the recommendations regarding the Industrial Com- 
mission. All of the other recommendations culminate in the validity 
of its investigations. Investigations furnish the basis for drafting 
laws by the legislature, for formulating rules and regulations by the 
commission (par. 5), for interpretation of laws and rules by the 
courts, and for prosecutions in enforcing the laws. The recommenda- 
tions for an industrial commission, for an advisory council, for civil- 
service appointments, for subsidies (par. IT), and for court proce- 
dure (par. 7) are all directed toward securing reliability and confi- 
dence^ in the investigations and conclusions of the commission. 

It is required that all investigations and proposed publications 
shall be submitted to the representative council before they are issued 
and time enough given for consideration and criticism. If, then, any 
rules are issued (par. 5) or investigations published without the 
approval of either side, their validity and accuracy are at once con- 
demned and the commission is discredited. Under a partisan or 
political department of labor, it is unlikely that statistics and inves- 
tigations are accepted, either by the public or by both employers and 
employees, at their face value. Nothing more serious can exist, in a 
country which depends so much on public opinion, than this distrust 
of official publications and statistics which purport to give all the 
facts upon which public opinion forms its conclusions. Employers, 


.mployees, and the general public should be able to rely implicitly 
for their conclusions on official statistics on wages, hours of labor, 
health, safety, cost of living, unemployment, costs of production, dis- 
tribution of wealth, strikes, boycotts, and all other material facts 
bearing on the relations of capital and labor. All labor legislation, 
all administration of labor law r s, all efforts at mediation and arbitra- 
tion, all recommendations of public bodies, go back for their justi- 
fication to statistics and investigations. The money of the Govern- 
ment is worse than wasted, and the officials are discredited if there 
remains any interested body of citizens who do not place confidence 
in these official statistics and investigations. The temptation is so 
great, in view of the struggle between capital and labor, to distort 
or suppress or obliterate facts that no precautions top great can be 
taken to secure thorough criticism, verification, and filling in of omis- 
sions before the facts are published. No matter whatever else may 
be recommended, no recommendation can be depended upon that 
does not provide fully for the integrity, reliability, and complete 
inclusion of all material facts in every publication of official statis- 
tics and investigations. There is no certain method of doing this 
except in the recommendation that all alleged facts of statistics and 
investigations be submitted to the parties directly interested and 
affected by the conclusions. The proposed advisory council, composed 
of acknowledged representatives of these parties, acting independ- 
ently, without intimidation or connivance, and watchful against 
any advantage attempted by the opposing yet cooperating interest, 
consulting their constituents on any matter, can be trusted to see to 
it that no material facts or conclusions are published without con- 
clusive proof and none suppressed without disproof. If any member 
of the council objects to any final statement or conclusion, he is enti- 
tled within limits to have his protest published along with the report 
of the commission. In fact, the entire spirit of these recommenda- 
tions is the utilization by Government of the organizations that have 
both common and hostile interests, in order to protect the Govern- 
ment itself against partisanship and partiality in dealing with the 
serious conflict between those interests. It is because the reports, 
findings, and recommendations of the present commission were not 
submitted to parties affected thereby or to an advisory committee 
similar to the one proposed for a permanent commission that we can 
not accept them as verified or criticized, so that we could have before 
us when finally acting upon them any criticisms or assurance that 
their statements were accurate or that important omissions had not 
been made. An advisory committee to this commission, similar to 
the one proposed, was approved for a short time and, after making 
changes in the proposals of the staff having the measures in charge, 
made certain unanimous recommendations as bills to this commis- 
sion, but the committee was discontinued before it could complete its 
work. No staff of investigators, however careful, can be expected 
to have such complete knowledge of their subject as to be trusted 
without the scrutiny and criticism of the interests or persons affected 
by their reports. Whenever a permanent industrial commission is 
created there can be no provision more essential than that of provid- 
ing the representative machinery for reliable investigations, find- 
ings, and publicity. 

38819 16 13 


An illustration of the method of supervision of investigation here 
advocated is afforded by the Interstate Commerce Commission. The 
statistics of wages and hours collected by that commission are of 
importance in matters of mediation. They were so collected and 
arranged that they could not be relied upon for that purpose. Con- 
sequently a conference was called, consisting of the railway account- 
ants, the railroad brotherhoods and other labor organizations, the 
statisticians of the commission and of the Department of Labor, to 
consider the statistics. After the discussion, which failed in some 
respects to reach agreement, the Interstate Commerce Commission 
issued new rules changing several features of the statistics in order 
to avoid the criticisms advanced, the changes to go into effect in 1915. 
It is this method of statistical investigation that is recommended to 
be made mandatory on Industrial Commissions. 

The Industrial Commissions herein recommended are modeled in 
part upon the example of the railroad and public utilities commis- 
sions, the Interstate Commerce Commission, the Federal Trade Com- 
mission, and the Federal Reserve Board. Their powers are partly 
legislative, partly judicial, and partly executive. That which is most 
important is their, power of making investigations of facts and condi- 
tions and then issuing orders (par. 5) based on such investigations. 
The legislature or Congress lays down a general policy or standard, 
but does not go into all of the minor details and variations that are 
needed to fit the policy to actual conditions. In the case of rail- 
roads it gives up the attempt to enact a schedule of freight and 
passenger rates and merely requires of railroad corporations that 
all rates and services shall be reasonable, that there shall be no 
discriminations, and so on. The commission then investigates 
each case as it comes up and issues a detailed order intended 
to carry out the policy and enforce the standard laid down by 
the legislature or Congress. In the case of labor law the legisla- 
tive standards differ according to the object of the law. In matters 
of safety the legislature requires employers to keep their work places 
safe, and leaves to the commission the investigation of conditions 
and of safety devices necessary to be installed in each industry or 
shop, with power to order them installed. In compensation for ac- 
cidents the legislature requires the employer to pay 50 per cent or 
more of the wages lost for a certain time, and then gives the com- 
mission power to investigate each case if necessary, and to determine 
exactly the amount arid all details, and to order the employer to 
pay that amount. Other standards may be set up by the legislature, 
if it wishes to do so, for hours of labor, minimum wages, exclusion 
of women and children from dangerous employment, regulation of 
private employment offices, and so on, covering the entire field of 
labor legislation. 

It is evident that the legislature can not itself make all of these 
investigations. It must depend upon others. In practice, too, the 
legislature and Congress are not willing to delegate to a single execu- 
tive official the power of issuing rules and orders. This power is 
quasi judicial. Consequently the legislature and Congress create 
commissions with three or more members, in order to require delib- 
eration and a fair representation and hearing for all interests that 
are benefited by or compelled to obey the rules. A single executive 


official is liable to be one-sided and partisan, or to act without delib- 
eration, or to be frequently changed, but a commission can be organ- 
ized so as to be impartial, deliberative, and continuous. 

In the administration of all other labor laws, such as those on in- 
dustrial education, child labor, hours of labor, minimum wage, and 
so on, there are points of antagonism and points of harmony between 
capital and labor. The points of antagonism are enlarged and ex- 
aggerated when one side or the other, through practical politicians, 
controls the offices. The points of harmony can only be discovered 
by investigation, and the investigations must be cooperative between 
employers and unions, else neither side will have confidence in the 
results. The Industrial Commission and its subordinate officials, of 
course, have to be depended on to make the actual investigations, 
but the provision in the foregoing recommendation, that all matters 
and all proposed publications shall be submitted to the advisory 
council, representing the opposing interests, for their advice and 
criticism but not their veto, goes as far as practicable toward secur- 
ing that the investigations, conclusions, and rules of the commission 
and its subordinates will have the confidence of both sides. 

The particular recommendation regarding investigations of labor 
disputes is associated with a later recommendation regarding media- 
tion. (Par. 14.) While recommending voluntary mediation, it is 
recognized that strikes and lockouts are of such public importance 
that the public is entitled to accurate information regarding their 
causes and continuance. In connection with its other investigations 
the investigation of strikes and lockouts shows underlying causes of 
industrial unrest and the failure of legislation or administration to 
remedy them. Official investigations and reports on those subjects 
have not as a rule been accepted, because they have been colorless 
for fear of giving offense, or because they are conducted under the 
direction of partisans of one side or the other. It is expected that 
investigations conducted under the supervision of the advisory 
council will avoid the defects of many official investigations. 

All investigations of a general character, such as those on safety 
devices, w r ages, hours, conditions of labor, and interstate competition, 
should be made by the Federal commission, relieving the State com- 
missions or bureaus for their work of local investigations, administra- 
tion, and inspection, the Federal commission to be the central 
standardizing agency, leaving the State free to adopt or reject the 
standards. (Par. if.) The investigation of interstate competition 
and the effect of minimum wage laws will be of use in the most 
difficult part of the work of State minimum wage commissions, which 
we indorse in so far as women and children are concerned. 


5. The commission to make rules and regulations for carrying into 
effect the provisions of the labor laws which it enforces. This may 
be done by providing, in the industrial commission law or otherAvise, 
for certain brief standards as may be determined by the legislature, 
for example, that all places of employment shall be safe and sanitary, 
as the nature of the industry will reasonably permit, that no person 
shall be allowed to work for such hours of labor or at such times as 


are dangerous to his or her life, health, safety, or welfare, that em- 
ployment offices shall give correct information, shall not split fees, 
and so on. Or, less preferably, the existing labor laws may be re- 
tained or new ones enacted in minute detail, and the Industrial Com- 
mission may be given power merely to make such additional rules 
and regulations or variations from the laws as are necessary to give 
them full effect. Rules to be submitted to the advisory council before 

The method of brief legislative standards above mentioned is 
adopted by most of the States having Industrial Commissions and it 
is here recommended, but the latter is the method adopted in New 
York. The original policy of American labor legislation involved 
an attempt to cover in detail every contingency which might arise. 
This method has proved itself impractical. It is impossible for a 
legislature charged with so many other duties and having but little 
time for attention to any of them, to intelligently provide in detail 
for such matters as the safeguarding of machinery or the regulation 
of hours of labor and periods of rest in hundreds of different em- 
ployments and. under hundreds of different circumstances. Legisla- 
tion upon these subjects has to-day reached the stage long ago 
reached by legislation relating to public health and public utilities. 
The legislature can provide only the general standards and must 
leave to administrative officers the duty of " filling in details." 

Whether the labor laws of a State consist onty of a few sections, 
as in Wisconsin, or are a bulky law, as in New York, there still exists 
the necessity for the further filling in of details, and if the labor laws 
enacted by the legislature are at all lengthy, as in New York, there 
exists the additional necessity of some means for variations in deserv- 
ing cases, either by express* provision of the law or, in the absence 
thereof, by the tacit overlooking of violations by the officials charged 
with the administration. This latter practice is an opportunity for 
graft or favoritism. A factory inspector goes into an establishment 
and has the power to order changes amounting to several thousand 
dollars. He finds many points where the strict letter of the law does 
not apply. Since he is the only person who actually interprets the 
law on the ground he can readily overlook violations. But where the 
laws do not go into details, but an Industrial Commission determines 
the details in the form of rules fitted to conditions, the inspector no 
longer has discretion in overlooking violations. He must report all 
the violations, and the employer has another remedy besides influ- 
encing the inspector. He can go to the commission with a petition 
that a different rule be made to apply to his case, and the commission, 
after a public hearing, may grant or reject the petition, or modify its 
rule for that particular establishment. Variations must be made in 
any case. The difference is, that where there is no commission with 
power to make rules, the variations are made in secret by the different 
inspectors, while where the commission has this power they are made 
in public. (Par. 6.) 

In the recommendations above, the briefest kind of a legislative 
standard is indicated. Whatever its length, however, the best method 
of filling in the details is the same. It is not unconstitutional to del- 
egate such power to a single individual, but it is undesirable and, as 
already pointed out. impracticable to confer it upon one person. The 


alternative is to confer it upon a board or commission. The chief 
question arising here is whether a board shall be created especially 
for this purpose or whether one board shall perform this duty to- 
gether with that of administering the laws and the rules and regula- 
tions made by it. The latter is the Industrial Commission recom- 
mended. The other method has been tried in the two greatest indus- 
trial States in the Union, New York and Pennsylvania, but the 
former State abandoned it after a two-j^ears' trial. In New York it 
was adopted two years ago when the factory investigating commis- 
sion declined to take the administration of the labor department away 
from a single executive, but adopted a compromise through establish- 
ing an industrial board of four members, together with the labor 
commissioner as chairman, to perform the rule-making function 
whether in the form of general rules or variations. While the board 
has done much good work, there remains little doubt that the same 
work can be performed even more intelligently and. effectively by a 
commission which is also actively engaged in administrative work. 
In both cases, the aid of committees representing particular industries 
or interests has been and must be largely relied upon. On the other 
hand, an industrial board such as formerly existed in New York, and 
still exists in Pennsylvania, the rule-making duties of which are 
solely legislative in their nature, without power of enforcement, is 
not much better equipped to make such rules and regulations than 
the legislature, except that its number is smaller and its personnel 
chosen particularly for this one duty. 

The recommendations provide different methods of securing uni- 
formity of State and Federal legislation on various subjects (pars. 
17, 18). This uniformity has been secured in the case of railroads 
by exactly the same method as the one here proposed to be made man- 
datory. When Congress enacted a law requiring safety couplings 
there were a large number of manufacturers of couplings in the mar- 
ket. Congress gave authority to the Interstate Commerce Commis- 
sion to decide on the kind of couplings that w T ould accomplish the 
object of securing safety. The commission called in the representa- 
tives of the railroads and of the railroad brotherhoods, with the 
manufacturers of couplings, and after several conferences the present 
standards were adopted. Other standards applying to railroad cars 
were also adopted in this way. 

At the present time there is urgent need for Federal aid in secur- 
ing uniformity of safety devices. This can be done to a certain 
extent through voluntary cooperation with the States. Various States 
with industrial commissions are going ahead with their own stand- 
ards, and there is apparently no means of securing uniformity until 
a Federal commission is given power to act. This could be done if 
the Federal commission Drought together representatives of State 
factory inspectors, along with its advisory council of employers and 
employees, and the private national safety organizations mentioned 
under paragraph 2. B} 7 agreeing on standards, these could be 
adopted by every State commission which has power to make rules. 
And the Federal commission would be merely a central standardiz- 
ing agency, leaving to the States the voluntary adoption of the stand- 
ards. If it were desired to go further, a Federal law granting to the 
Federal Industrial Commission power to set standards for interstate 


shipment of machinery not equipped with the standard safety devices 
might be adopted. Each method would require a Federal commission 
to set standards. 

The illustration regarding safety is taken not because that is the 
most important problem, but as furnishing an illustration of possible 
methods applicable in other lilies. Similar uniformity might be 
secured in the regulation of private employment offices and other 
lines of labor legislation, as the States or Congress may determine. 
Of course, if the Congress enacted legislation similar to the Palmer- 
Owen child-labor bill, the extreme step would be taken of attempt- 
ing to force States to come up to Federal standards. This may be 
necessary in some cases, but the Federal Industrial Commission 
affords methods of securing uniformity in some branches of legisla- 
tion by less extreme measures. 

The courts have generally denied the contention that this delega- 
tion of power to make rules and issue orders is unconstitutional as a 
delegation of legislative or judicial power, and the Supreme Court 
of the United States has used the term " administrative " to describe 
those powers which are partly legislative or judicial, but are not so 
exclusively one or the other that they may not be properly conferred 
upon an executive or administrative body. ( See Interstate Commerce 
Commission v. Humboldt S. S. Co., 224 IT. S., 474; Pennsylvania 
Kailway Co. v. International Coal Mining Co., 230 U. S., 184; Mitch- 
ell Coal & Coke Co. v. Pennsylvania Railway Co., 230 U. S., 274.) 


6. Any person in interest to be entitled to petition the commission 
for a hearing on the legality or reasonableness of any rule or regu- 
lation or of any order directing compliance with any provisions of 
law or other rule or regulation or for a special order applicable to 
a single establishment. The commission may change its rule or regu- 
lation before final decision by a court on its legality. 

This recommendation is embodied in one form or another in all of 
the State commission laws. Under the prevailing system of adminis- 
tering labor laws a person affected by an order enforcing an act of 
the legislature has no opportunity to object to its constitutionality, 
reasonableness, or validity except by awaiting prosecution and sub- 
mitting his objection as a matter of defense. Not only is this cum- 
bersome and undesirable as a matter of procedure, but it is open to a 
very serious objection that it brings this matter up often for final 
decision by a petty court, or even before a local magistrate or justice 
of the peace. 

Not only does a provision of the sort here recommended give the 
person affected opportunity to make proper objections, but it gives 
the commission an opportunity to reconsider its rules and orders 
from the point of view of their actual application in concrete cases 
before they are subjected to tests in the courts. Questions arising in 
the application of rules and orders to concrete cases frequently de- 
pend upon facts and conditions which are difficult to bring out 
accurately and thoroughly in the courts. The proceedings before the 
commission will develop the facts and conditions which are alleged 
to justify the provision and those which the employer depends upon 


defeat it better than could be done in any court. It is frequently 
necessary for the court to have such facts available in order to ar- 
rive at a proper decision upon the constitutionality of such a rule 
or order, and in the absence of such a proceeding as this, an appellate 
court has practically no means of obtaining such information. This 
could not be better illustrated than in the recent decision of the New 
York Court of Appeals (People v. Schweinler Press, 2M N. Y., 395), 
upholding the constitutionality of the section of the labor law pro- 
hibiting night work for women, and, in effect, overruling its own 
decision of eight years previous, holding a similar provision un- 
constitutional. In the opinion of the recent case the court frankly 
says that its previous decision was due to a lack of proof at that 
time that the prohibition bore some direct relation to the public 
health and welfare, and that subsequently such proof had been 
gathered and was of such a nature as to warrant a different de- 
cision. In this case the evidence had been gathered largely through 
the efforts of a special factory investigating commission, but the 
whole incident illustrates the necessity for a thorough consideration 
of all facts involved before the matter is taken into the courts, and 
making the results of such consideration available for the use of the 

The special order applicable to a single establishment is necessary 
in order to take into account peculiar conditions, which, if rigidly 
applied, might render the entire law or general rule unconstitutional. 


7. Any person in interest to be entitled to bring a special action 
in court to test the legality and reasonableness of any provision of 
the labor laws, of any rules and regulations made thereunder, or of 
any order directing compliance therewith. (It is probably advis- 
able, in the case of State commissions, to limit the jurisdiction of 
such cases to a court sitting at the State capitol.) Actions involv- 
ing rules and regulations and orders not to be brought until final 
determination of the petitions for review (par. 6) by the commis- 
sion. Provision also to be made for suspending prosecutions pend- 
ing determination of petitions or actions for review in court. Mat- 
ters of fact which had not been before the commission to be referred 
back to the commission and opportunity given for the commission 
to change its rules or regulations before final decision by the court. 
Rules and regulations of the commission to be made prima facie 
reasonable in all court proceedings. 

This recommendation is provided for in different ways in the dif- 
ferent State commission laws. The purpose of these provisions, to- 
gether with those relating to review by the commission (par. 6), is 
to secure a uniform interpretation of the labor laws and the rules 
and regulations for carrying them into effect ; to prevent their being 
held unconstitutional by petty courts (which often results, on ac- 
count of the impossibility of appealing such a decision, in an abso- 
lute bar to further enforcement of such provisions in that locality, 
even though the provisions may eventually be upheld by a higher 
court) ; and to protect the commission from ill-considered action by 
higher courts not having before them sufficient information to enable 
them to arrive at an intelligent decision. 



8. The commission to have the incidental powers such as those of 
subpoenaing and examining witnesses and administering oaths, and 
so on, necessary for the full performance of duties imposed upon it. 
These powers, however, to be strictly limited to those branches in 
which the commission, on the basis of experience or the constitutional 
rules regarding evidence, finds them indispensable. In all other 
work the commission to have no powers of compulsory examination, 
and so on. 

The powers of compulsory investigation and public hearings are 
liable to serious abuse in order to gain some temporary publicity or 
personal advantage, but in practice it is found that competent in- 
vestigators and informal conferences, such as those of the proposed 
advisory councils, can secure more valuable and reliable information 
than when individuals are placed on the stand and required to talk 
to the stenographer. 


9. In all industries or occupations operating continuously day and 
night and seven days a week the legislatures or Congress should 
enact laws requiring three shifts of eight hours each and one day of 
rest in seven, or their equivalent, administered under rules of an in- 
dustrial commission laid down for each industry or establishment as 
may be required. 

This class of legislation has been widely adopted in European 
countries, but has been found unenforceable without the aid of an 
administrative body competent to take into account the many dif- 
ferences of different establishments. In those countries hundreds of 
different rules are issued for different industries. For example, the 
rules for Pullman employees would differ materially from those for 
steel mills or hotels. We consider such laws unenforceable without 
this provision, and their enforcement can not be secured without a 
commission under the supervision of a representative council such as 
we recommend. 

The Industrial Commission, with its advisory council, in its ad- 
ministration of employment bureaus is evidently the body to work 
out improvements not only in the bureaus themselves but in meas- 
ures designed to provide for the unemployed or to regularize em- 
ployment, such as workmen's hotels, or advice to Federal, State, and 
municipal authorities for shifting their work to the winter months 
or to periods^ of depression. These matters have been remarkably 
provided for in Germany, where the employment bureaus, with their 
advisory councils, have become the most effective of those in any 

Such measures as sickness insurance, invalidity insurance, and 
unemployment insurance evidently require a large amount of investi- 
gation before they can be recommended. Their principal object 
should be the cooperation of employers and employees in the preven- 
tion of sickness, invalidity, and unemployment. Their administra- 
tion and the drafting of laws and rules will evidently have to be in- 
trusted to a commission with such an advisory council as is pro- 



10. That such detective agencies may operate in more than one 
State, or be employed by industrial corporations engaged in inter- 
state commerce, or which may use the mails shall be compelled to 
take out a Federal license, under the Industrial Commission, with 
regulations that will insure the character of their employees and 
the limitation of their activities to the bona fide business of detecting 
crime. Similar license and regulation for all private employment 
offices engaged in interstate business. 

That all enterprises shall be forbidden the right to employ private 
armed guards, except as w r atchmen on the premises, or to have such 
watchmen deputized as police except where such is found necessary 
by the State or Federal Industrial Commission. That rules adapted 
to the differences required by various industries should be made by 
the Industrial Commission, in order to carry these laws into effect. 

That such enterprises shall exercise their right to call upon the 
constituted authorities to furnish them with the necessary protection 
to their property, and to the lives of their workers, against the threat- 
ened attack of rioters or strikers; and that it shall be incumbent 
upon the constituted authorities to furnish such protection in the 
way of police or deputy sheriffs, and that a failure on their part to 
do this shall lay the political subdivision in which such damage to 
life or property may take place liable to damages. That all indi- 
viduals denied their constitutional rights of habeas corpus, free 
access to public highways, free speech, etc., shall have similar power 
of action in damages against the political division in which such 
denial takes place. That all highways now claimed as private prop- 
erty shall be made public. 

That the militia of the several States being subject to regulation 
by Congress, carefully drawn rules for their personal organization 
and conduct in the field shall be drawn up by the War Department, 
after conference with the Industrial Commission and advisory coun- 
cil, and that all parties arrested by the militia during the time of 
troubles shall be turned over for trial to the civil authorities. Simi- 
lar rules should be drawn up by State authorities, with the coopera- 
tion of the State industrial commission and its advisory council, for 
the regulation of State constabulary. The War Department, with 
the aid of the Industrial Commission and advisory council, should 
investigate and recommend legislation regarding the shipment of 
arms and guards in interstate commerce. 

One of the principal reasons why corporations are compelled to 
employ private guards is the failure of the taxpayers to provide 
them. This is also one of the principal reasons why laborers and 
labor organizers are denied their constitutional rights. Taxpayers 
take little part in the elections or otherwise to provide officials com- 
petent to and willing to protect the rights both of capital and labor, 
because the invasion of these rights does not affect them. This would 
be changed if the political subdivision were made liable in damages. 
Yet it is not proper, as has been done in some States, to provide for 
protection of property in this way without providing also for pro- 
tection of labor in the same way. Laws designed to regulate deputy 
sheriffs or the police force can not be made effective under our sys- 
tem of local government without liability of taxpayers for violation. 


The drafting of rules for the conduct of militia or State constabu- 
lary should not be left entirely to military authorities but should be 
drafted with the joint discussion and advice of employers and em- 
ployees, who are more directly affected than other classes in the com- 
munity. It is not intended that the Industrial Commission or ad- 
visory council shall have a veto on any regulations issued by the 
military or police authorities, but they should have opportunity for 
criticism and advice. The entire subject of policing industry has not 
been sufficiently investigated from all points of view, and more spe- 
cific recommendations than these can not now be indorsed. It is 
therefore recommended above that further investigations from all 
points of view should be referred to the proper Federal and State 
authorities, assisted by the representatives of all interests affected. 


11. State commissions (and perhaps the Federal Commission) 
should render aid and assistance to deserving workmen in the adjust- 
ment of disputes other than collective disputes, and the recovery 
of claims arising out of their relations with their employers, and 
generally take such action as may be necessary for the protection of 
employees from fraud, extortion, exploitation, and other improper 
practices. For this purpose the commission to be authorized to 
assign members of its staff to appear in justice and other courts 
which adjudicate such claims, and to create local advisory committees 
of employers and employees to pass upon all such claims in coopera- 
tion with the deputy of the commission and in advance of court 

This recommendation has been partly adopted in the New York 
act. An examination of the reports of existing public agencies of 
this sort and of the legal aid societies of the large cities of this coun- 
try shows that by far the largest single class of cases with which they 
are called upon to deal is the adjustment of small wage claims. In 
some communities there already exist municipal and other so-called 
" poor men's courts " and " small debtors' courts," intended especially 
for the speedy settlement of small claims and disputes ; but even the 
best of these courts are scarcely sufficient in themselves to meet the 
situation which confronts many employees. In some of them a very 
large proportion of disputes over small wage claims, in some in- 
stances as high as 90 per cent, can be settled if the two parties can 
only be brought together under conditions which make it certain 
that if a settlement is not made there is some one standing back of 
deserving claimants ready to push their cases. 

Then, too, these cases frequently involve a general practice from 
which many individuals suffer, and yet it is impractical for any one 
of them to take the necessary action to secure redress or put an end 
to the practice. Members of a given class are often made the victims 
of exploitation or improper practices under conditions where it is 
not practical nor worth while for any individual to fight the matter 
out. and yet where the aggregate loss to the class is considerable. 
The ordinary shipper is generally able to pay for necessary legal 
services, and still Congress and a number of the State legislatures 
have required the Interstate Commerce Commission and the State 
commissions to render just such aid to shippers having claims against 


railroads, because of the economic disadvantage in which an indi- 
vidual shipper is placed in a contest with the railroads. That em- 
ployees stand in need of such protection from the State is evidenced 
by the mass of labor legislation which has been enacted and the 
agencies which have been created for its administration. 

Nor does such provision lack precedents other than the railroad 
legislation already referred to. For some years the bureau of 
industry and immigration of the New York Labor Department has, 
in cooperation with the New York Legal Aid Society, extended just 
such assistance to immigrants, and almost the exact provision here 
recommended has been included in the industrial commission law 
just enacted in New York. 

Kansas City maintains its own legal aid bureau as part of the 
city government, and of the five or six thousand cases a year han- 
dled by it, almost half are wage claims. The largest class of cases 
handled by the public defender of Los Angeles is wage claims. 

The above recommendation is intended to establish in the United 
States a system analogous to the industrial courts of France, Ger- 
many, and other European countries. But it can not be expected 
that many localities will initiate this class of courts, and it will 
require a State commission to make them general. If municipalities 
were given authority and then actually established such courts, the 
State commission would withdraw. 


12. The Industrial Commission, upon request of the legislature or 
Congress, or the committee on relations between capital and labor, 
to investigate a subject and draft bills. The commission to make 
recommendations regarding legislation affecting subjects under its 

It is not proposed that the Industrial Commission shall initiate 
legislation or make recommendations, except on laws previously 
assigned to it for administration. Matters outside its jurisdiction 
would bring it into the political and controversial field. Yet when 
Congress or the legislature is considering new legislation, such as 
sickness insurance, unemployment insurance, and so on, it might 
refer the matter, in its own discretion, for further investigation and 
recommendation. Advanced legislation is fought out by lobbies 
and in committees, and the advantage of reference to the Industrial 
Commission would be the cooperation of its advisory council in draft- 
ing a workable law, eliminating " jokers," and carrying out the intent 
of the legislature. At present there is no definite means provided 
whereby lobbyists can be required to come together and confer 
regarding measures. They appear usually as antagonists or lawyers 
before legislative committees, and not as the conferees of an advisory 
representative council. This proposition is by no means a novel or 
untried one. After fruitless administration of the impractical coal- 
mining laws, which had been placed on the statute books mainly 
by the labor unions of Illinois and Colorado, the legislature turned 
the matter of revising the mining code over to a joint committee 
selected by the coal operators and the mine workers' union, and 
then enacted into law, without amendment, the code which the two 


opposing interests, in conference with the legislative committee, 
jointly recommended. The advisory committee on apprenticeship 
of the Wisconsin commission has recently agreed upon an apprentice- 
ship law satisfactory to employers, trade unions, and the commission, 
and this was adopted by the legislature without change. This 
method of legislation can be indefinitely extended to all matters, with 
the result that, while both sides protect their own interests, they 
: often eventually reach agreement on points where their interests and 
those of the public are common. 

This, of course, does not do away with the final authority of Con- 
gress or the legislature, nor with the battle of opposing interests in 
the legislative branch of government where they have not been able 
to agree, nor where other interests are affected. Here is the proper 
place for the lobbyists of both sides to endeavor to get the support 
of representatives of the people, and to override the other side. 
There could not be much of the advanced legislation required to meet 
the problems of capital and labor without a struggle in the legis- 
lature or Congress on new issues. But when the legislature is ready 
to take an advanced step, it is an advantage to require the com- 
batants to confer on the details and to subject their differences to 
investigation by an impartial body on which they have representa- 
tion. This advantage is intended in the above recommendation. 


13. At the request of the Supreme Court (State or Federal) the 
Industrial Commission shall investigate and report upon any ques- 
tions of fact referred to it by the court and bearing upon the con- 
stitutionality or reasonableness of any Federal or State statute or 
administrative rule on the relations of employer and employee. 
Amendment of the judicature act so as to permit a State to appeal 
from its own supreme court to the Federal Supreme Court on a 
decision against a State based on conflict with the Federal Constitu- 

While the principles of law are held to be settled and unchange- 
able, their applications change when conditions change. Decisions of 
the courts on the constitutionality of labor laws often turn on the 
information which is placed before the court as to the necessity of 
the law. The Supreme Court declared an eight-hour law for miners 
constitutional and a ten-hour law for bakers unconstitutional largely 
because it was furnished with conclusive information on conditions 
in the mines but not in the bakeries. (Holden v. Hardy, 1898, 169 
U. S. 366; Lochner v. New York, 1907, 198 U. S. 45.) the court of 
New York in 1907 declared (People v. Williams, 189 N. Y. 131) a 
law prohibiting night work for women unconstitutional, but held a 
similar law constitutional in 1915 (People v. Schweinler Press, 214 
N. Y. 395), and gave as the reason for its change of opinion the 
evidence placed before it in the second case. The court said in 1915 : 

1. It is urged that whatever might be our original views concerning this 
statute, our decision in People v. Williams (1907) is an adjudication which 
ought to hind us to the conclusion that it is unconstitutional. While it may 
be this argument is not without an apparent and superficial foundation 
and ought to be fairly met, I think that a full consideration of the Williams 
case and of the present one will show that they may be renlly and substantially 
differentiated, and that we should not be and are not committed bv what was 






and decided in the former to the view that the legislature had no power 
to adopt the present statute. * * * 

While theoretically we may have been able to take judicial notice of some 
of the facts and some of the legislation now called to our attention as sustain- 
the belief and opinion that night work in factories is widely and substan- 
ally injurious to the health of women, actually very few of these facts were 
lied to our attention, and the argument to uphold the law on that ground was 
rief and inconsequential. 

Especially and necessarily was there lacking evidence of the extent to which 
during the intervening years the opinion and belief have spread and strength- 
ened that such night work is injurious to women ; of the laws, as indicating 
such belief, since adopted by several of our own States and by large European 
countries, and the report made to the legislature by its own agency, the factory 
investigating commission, based on investigation of actual conditions and study 
of scientific and medical opinion that night work by women in factories is gen- 
erally injurious and ought to be prohibited. 

Other illustrations might be given showing' the way in which 
courts respond to the needs of progressive legislation when once they 
have before them ascertained facts. Investigations by attorneys or 
interested parties may have a certain weight in court, but the weight 
can not be as great as the investigations and findings of an impartial 
commission, supervised by representatives of the interests affected 
by the decision. Criticism of the courts for decisions overturning 
laws designed to protect labor, and the demands for constitutional 
amendments depriving the court of power to declare laws unconsti- 
tutional, or providing for recall of decisions or recall of judges, often 
fail to reach the real difficulty. The difficulty is that bureaus or 
departments of labor and statistics have been so incompetently man- 
aged or their investigations so remote from the concrete facts that 
need to be established that the courts have had no reliable informa- 
tion and have been compelled to fall back on their own meager 
information or " common knowledge." If the court had at hand a 
reliable and well-equipped referee with power to get the facts, as in 
the Industrial Commission, it is probable that it would call upon 
such referee instead of basing its judgment on the doubtful claims 
and technical arguments of attorneys. 

It will be noted, however, that this recommendation is merely sup- 
plementary to those in paragraphs G and 7. In those paragraphs 
the rules and regulations of the commission itself dealing with labor 
conditions are tested before the court, and they are made prima f?.cie 
valid and reasonable as based on adequate investigation. The present 
recommendation is optional with the court and may pertain to an 
act of the legislature or the rule of an administrative body upon 
which the court is not reliably informed as to the facts. 

A provision similar to this is included in the recent Federal Trade 
Commission act (sec. 7). 

The recommendation for amendment by Congress of the judicature 
act is based on the fact that private individuals or corporations can 
now appeal to the Federal courts if the decision of the State court is 
against them, on the ground of conflict with the Federal Constitu- 
tion, but the State itself can not appeal if its own State court has 
decided against the State on the ground that the State law conflicts 
with the Federal Constitution. It is sufficient that a State court 
should decide issues under the State Constitution, but the Federal 
Supreme Court alone should decide finally all issues under the Fed- 
eral Constitution. With the provision % that the Supreme Court 


should require the Industrial Commission to investigate and report 
upon the facts which are alleged to justify the State legislation in 
question, the way is prepared for the Supreme Court to have before 
it the economic and social facts necessary to pass intelligently upon 
these questions of constitutionality. 


1-i. The Industrial Commission (State or Federal) shall appoint, 
remove, and fix the compensation of a chief mediator of industrial 
disputes, the chief mediator to hold his position until removed by 
the Industrial Commission and to appoint such assistants as may be 
needed, and to fix their compensation with the approval of the Indus- 
trial Commission. He should appoint temporary mediators for spe- 
cial cases, without requiring them to give up their private business 
or offices. 

The chief mediator and all assistant mediators to be selected from 
an eligible list prepared by the Civil Service Commission on a 
nonassembled examination, with the assistance of the Industrial 
Commission and the advisory council. 

The chief mediator and his staff to have no powers whatever of 
compulsory testimony and to be prohibited from arbitrating any 
dispute, from making any public recommendation, or from revealing 
in any way, directly or indirectly, any information which they may 
have secured from any parties relative to an industrial dispute. Any 
violation to be sufficient ground for immediate removal by the Indus- 
trial Commission. The powers of the mediators tobe those solely 
of voluntary mediation or conciliation, but the chief mediator shall 
offer his services in confidence to both sides of a dispute which, in 
his judgment, is of public importance. 

The chief mediator and his staff to be wholly independent of the 
Industrial Commission, except as to appointment and removal, to 
the extent that they be prohibited from reporting any facts or rec- 
ommendations whatever to the Industrial Commission or any other 
authority relative to the merits of any industrial dispute. 

In case the mediator is unable to secure an agreement through con- 
ciliation, he shall recommend arbitration to both parties, and if both 
consent to abide by the decision of arbitrators he shall proceed to 
assist them in selecting a board of arbitration in any w 7 ay and con- 
sisting of any number of members that both sides may agree upon. 
If agreement is not reached within a specified time on the third 
party to the board of mediation, the chief mediator shall appoint the 

In case both parties do not consent to arbitration the mediator 
shall recommend the appointment of a board of mediation and in- 
vestigation, which shall have power to make public its findings and 
recommendations, but such recommendations shall not be binding 
on any person. If both parties shall consent to such a board, the 
mediator shall assist them in creating the same and shall appoint the 
third member, if the parties can not agree on the same within a 
specified number of days. 

In case both parties accept either a board of arbitration or a board 
of mediation and investigation, such board, as the case may be, shall 


ta ve power of compelling testimony. The Newlands Act and the 
Department of Labor act should be so amended that all mediation 
and conciliation, whether on railways or in other industries, shall 
be consolidated under the mediator of the Federal Industrial Com- 
mission. The Federal commission should cooperate with State 

In the case of women and children, minimum wage boards should 
be created by the State industrial commissions. 

The foregoing recommendation is intended to provide for strictly 
" voluntary " methods of mediation and arbitration. When engaged 
in this branch of its work the commission is not only prohibited from 
using its compulsory powers, but its mediation work is so rigidly 
separated from its other work that it can not even be suspected of 
using the coercive power of Government to favor either side. The 
mediator and his staff are to be strictly confidential advisors to the 
opposing interests, without the power of Government, or even the 
threat of using that power, to coerce either side of a collective dis- 
pute. If coercion is used in the form of " compulsory testimony " it 
is only with the previous voluntary consent of both sides. 

The reasons for reaching this conclusion, and for recommending 
that in other branches of its work the proposed commission shall 
have the ordinary coercive powers of Government, are based on the 
fundamental distinction between collective bargaining and the in- 
dividual labor contract. The principle in general is, that Govern- 
ment should not employ its coercive powers to regulate collective bar- 
gaining, but should, in certain matters, employ the force of law and 
administration to regulate the individual labor contract. It does the 
latter through laws on child labor, hours of labor, safety and health, 
workmen's compensation, sickness insurance, minimum wage, and 
so on. 

Collective bargaining, in its last analysis, is based upon the coer- 
cive power of antagonistic classes organized for aggression and de- 
fense. The bargaining power of either side is the power to use 
the strike against the lockout, the boycott against the blacklist, the 
picket against the strikebreaker, the closed union shop against the 
closed nonunion shop, and so on. These are essential weapons, and no 
plausible verbiage or double meaning of words should blind us to the 
fact that these weapons are coercive, and are intended to be coercive, 
and, in the last analysis, will be used, secretly or openly, as coercive, 
by either side. Their object is similar to legislation regulating the 
individual labor contract except that they regulate it through joint 
agreement backed by their coercive weapons, instead of fines and 

The question then is, Shall the coercive power of Government be 
used to deprive one side or the other, or both sides, of any or all of 
their coercive weapons designed to control the individual labor con- 

The most extreme use of this power is known as compulsory arbi- 
tration. Here the Government attempts to deprive both sides of all 
coercive weapons by completely prohibiting strikes, lockouts, boy- 
cotts, blacklists, picketing, and strikebreaking, and by preventing 
either side from using its methods of strategy designed to overcome 
the other side. 


But the Government may use its coercive power to deprive either 
side of only a part of its weapons or strategies. Arbitration, or a 
joint agreement, consists of several steps, and at each step each side 
either employs its weapons or else resorts to strategy in order to 
play for position and to gain an advantage when it comes to using 
the weapons. 

The first step in strategy of collective bargaining is recognition of 
the union ; that is, recognition by the employer of the representatives 
of the union by consenting to confer with them. How important this 
preliminary step is considered by both sides is shown by the mean- 
ing which they give to the term " recognition." To " recognize a 
union " is considered to be not to merely hold a conference with its 
agents, but also to investigate grievances and demands, to negotiate 
concerning the terms of a collective agreement, and even to employ 
union men on terms consented to by the union. Strictly speaking, 
these are not " recognition," but are steps in collective bargaining 
that follow recognition. Recognition in the ordinary use of the term 
(the one here usecl) would be merely a conference in which the em- 
ployer meets certain individuals, not as individuals but as recognized 
agents of the union authorized to speak on behalf of his employees. 
But it is so well understood that recognition, even in this limited 
sense, will be followed by other steps, that the decisive battle is often 
fought out at this point. The employer knows that, if he meets the 
leaders, the union has gained an advantage. He has acknowledged 
to all nonunionists and timid unionists in his shop that the union 
is something he can not ignore, and this is a flag of truce and a con- 
cession for his employees to join the union or come out openly on 
its side. By just so much he has weakened his bargaining power 
against the union. Consequently, if he has decided not to have a 
certain union in his shop he must refuse at the very beginning to 
confer with its agents. 

If, then, the Government steps in and compels both sides to confer, 
it may take the first step in the name of " compulsory investigation " 
or "compulsory testimony," without power to prevent a strike or 
lockout. If the Government is given power to step in and compel 
the employer and employee to testify, to produce papers and records, 
it is attempting to substitute compulsion for voluntary consent at 
two important steps of collective bargaining. It introduces com- 
pulsory recognition and compulsory negotiation 1 under the guise of 
" compulsory testimony." The mere compulsion on employers, 
through prosecutions, as proposed by our colleagues, to compel em- 
ployers to confer with unions, can have no result, unless it be accom- 
panied by compulsion to investigate, as in the Canadian and Colo- 
rado acts, or to arbitrate, as in Australia. If employers are com- 
pelled merely to confer they can, of course, reject all propositions, 
and the nominal recognition of the union thereby secured would only 
be a further opportunity for declaring their determination not to 

1 Those forms may appear ridiculous, but thoy nro not more ridiculous than tho torm 
"compulsory arbitration." Arbitration, strictly speaking, is the voluntary consont of 
both parties to refer a dispute to a third person and to accept and carry out his decision. 
It is no longer " arbitration " if the Government coerces the parties by constituting itself 
the third party and compelling them to accept and carry out the decision. But if, in com- 
mon xisaKo, we have ajrn'od to forgot the absurdity of compulsory arbitration, we can also 
forget the same absurdity in the terms " compulsory recognition'" and " compulsory nego- 


recognize the union. If such a law is intended to accomplish any- 
thing it should go further and compel the employers to submit to 
compulsory investigation or compulsory arbitration, and this would 
mean compulsion also on the unions to confer and testify or to arbi- 

In our hearings in San Francisco we found unions that refused to 
meet the employers for a joint agreement, but required them to sign 
up individually the demands which the unions had already decided 
upon. This can not properly be called collective bargaining or rec- 
ognition of an employers' association any more than the decision of 
employers not to deal collectively but to deal with their employees 
individually. A law requiring employers to confer with and recog- 
nize unions should also require unions to confer with and recognize 
employers, and if this is made effective it would result in something 
like the Canadian or Colorado acts^ described below. Employers 
who are strongly fortified against unions object to compulsory testi- 
mony because it weakens their bargaining power, but employers 
dealing with strong unions desire it because by recognizing the union 
they have already consented to investigation. Their next step is to 
compel the unions to wait for the investigation before striking. 

This next step in collective bargaining is usually a provision that 
both sides shall continue at work or return to work while investiga- 
tion and determination is in progress. This is, of course, the great 
object of arbitration, and practically all voluntary methods provide 
that work shall continue while arbitration is going on. This provi- 
sion is recognized in the Canadian industrial disputes investigation 
act, latterly adopted by New Zealand and Colorado. The Govern- 
ment prohibits either side from a strike or lockout for 30 days, 
pending compulsory testimony and recommendation, but the parties 
are not compelled to accept the recommendation. After the 30 days 
have expired they may start their strike or lockout without any 
legal penalty. The Government meanwhile invites each side to 
appoint its representatives on a board of investigation and media- 
tion and the two to select a third member. If either side refuses to 
appoint its representative the Government steps in and names the 
representative. If both sides are unable to agree on the third mem- 
ber the Government again steps in and names the third member. In 
other words, the Government coerces each side to go through the 
same forms that they would do if they agreed voluntarily to refer a 
dispute to arbitration, and it prohibits them from strike or lockout 
pending a finding and recommendation. This is compulsory recog- 
nition, compulsory negotiation, compulsory testimony, and compul- 
sory labor pending investigation, but without compulsion after inves- 

On the other hand, the weak union favors compulsory conference 
and recognition because it seems to give it an advantage in bargain- 
ing. Both strong and weak unions are opposed to compulsory testi- 
mony because they get the equivalent by recognition, and they fear 
that it will lead to the compulsory waiting of the Canadian act. For 
these reasons the Canadian system should be put in the same class 
as compulsory arbitration, since the Government interferes to weaken 
or strengthen the collective bargaining power of either side. This 

38819 1C 14 


is the essential point of Government intervention. The term " arbi- 
tration" is misleading because it signifies the voluntary agreement 
on an umpire and the voluntary acceptance of his award. But arbi- 
tration can not be voluntary When the Government throws its coer- 
cive power to one side or the other by appointing a representative 
of either side, or an umpire, on the arbitration board without the 
consent of both sides. This is coercive interference with collective 
bargaining power, which is the essential element in compulsory arbi- 

For this reason it can not be claimed that the Canadian system is 
" voluntary arbitration." This term is also misleading. Collective 
bargaining is not voluntary in the same sense that individual bar- 
gaining is voluntary, since it depends on certain coercive weapons 
such as strikes, boycotts, blacklists, and so on, together with strategy 
in using these weapons, and these are not instruments in individual 
bargaining. All that is meant by voluntary arbitration is that the 
Government does not use its coercive power to weaken or strengthen 
the collective coercion of either side. 

The first object of the Canadian law is the commendable one of 
bringing both parties together for investigation of the demands and 
grievances, with the hope that, by delaying hostilities for 30 days, 
time will be given for mediation, conciliation, and a voluntary agree- 
ment. For this reason the boards created are properly called boards 
of "mediation and investigation." It often occurs that within the 
30 days both sides reorh such a voluntary agreement and, if so, the 
board is dissolved after approving the agreement. 

The second object is, in case a voluntary agreement is not reached 
by this kind of mediation within 30 days, that the publication of a 
set of recommendations by the board will bring to bear the pressure 
of public opinion on both sides so that they will feel obliged to accept 
the recommendations and continue at work. Compulsory recogni- 
tion, negotiation, and testimony are used as the means of coercion 
through the support that public opinion may give to the Government. 

But mere public opinion is not enough to accomplish this object. 
The next step is the compulsory arbitration of Australasia, which 
brings the power of fine and imprisonment to enforce an award made 
by a public official. 

It is believed that any of these compulsory methods are unsuited 
to American conditions, and that the foregoing recommendation for 
a voluntary board of investigation, adapted from the Canadian act 
but without its compulsory features, will prove a valuable addition 
to the present Newlands Act, which goes only as far as voluntary 
arbitration in interstate railroad disputes. If one party or the other 
refuses to accept a board of arbitration with power to make a bind- 
ing award, it is proposed that the mediator shall invite both to create 
a board of investigation with power to take testimony and to make 
recommendations which are not binding as an award. The jurisdic- 
tion of the Newlaads Act is proposed to be extended tinder the 
Federal Commission to all labor disputes in all industries engaged 
in interstate commerce. It is believed that in many cases of serious 
public concern neither side can afford to reject an offer on the part 
of the Government to use its powers of compulsory testimony to 
ascertain the facts and to make recommendations, provided the 


parties retain their liberty to reject the recommendations. The value 
of this proposal consists in the probability that a thorough investi- 
gation, participated in by both sides, may lead to agreement, as it 
has often under the Canadian act. But this should be brought about 
by consent of both parties and not by compulsory representation of 
either side, nor compulsory postponement of hostilities, as provided 
in the Canadian act. 

The intent of the foregoing recommendation is that the mediator 
shall use all of the powers of persuasion that he can summon but is 
not to use, nor to be in a position to threaten or even to suggest the 
use of, any powers of coercion. Even compulsory testimony is to 
be used only in case he can persuade both parties to consent to its use. 
The mediator is not even permitted to make public any information 
he may acquire regarding a dispute, or to give that information to 
the Industrial Commission or to any other public authority that has 
the power of governmental coercion. Mediation and arbitration are 
to be voluntary throughout, as far as government is concerned. 

The case is different with individual bargaining. Here it is recog- 
nized that the individual worker is at a disadvantage with the em- 
ployer. In fact, he usually makes no bargain at all. He merely 
accepts or rejects the terms offered by the employer. Where this is 
so, and there is a public interest to be gained, Congress or the legisla- 
tures and the industrial commissions should exercise adequate com- 
pulsory powers to equalize and protect the bargaining power of indi- 
vidual employees. 

It should be remembered that in the eyes of the law the labor con- 
tract is an individual contract a contract between an individual 
workman and an individual employer. Even if the employer is a 
corporation of thousands of stockholders and bondholders, they are 
treated as a single individual for the purposes of a contract. But 
the law does not usually recognize a collective or joint agreement 
between a union and an employer or employers' association as a con- 
tract. The courts will not usually enforce it as they enforce indi- 
vidual contracts. Such a contract, so called, will not bind anybody 
by the force of law. A contract with a trade-union is not a contract 
in law; it is merely an understanding, or a usage, or a joint agree- 
ment that, when the real labor contract is made between individual 
employer and employee, it will be made according to the terms of 
the joint agreement. If an individual employer breaks the agree- 
ment by hiring a workman on different terms, the only means that 
the union has of enforcing the agreement is that of a strike. It is 
not a breach of contract. The union can not usually get an injunc- 
tion or damages in court on account of the violation. In the same 
way the employer's only practicable remedy is the lockout. He 
probably can not bring a suit for damages, because the union agree- 
ment was not a contract. The legislature might, of course, change 
the law and provide for the legal enforcement of the collective bar- 
gain. This would be compulsory arbitration. But as it now stands 
a joint trade agreement is a kind of usage or understanding agreed to 
by two opposing interests and generally enforced on individuals by 
the coercive weapons of strike, lockout, boycott, or blacklist. It 
differs from a statute in the fact that its enforcement is left to pri- 
vate organizations or individuals while the enforcement of a statute 


or order of a commission is effected by the penalties of imprisonment, 
fines, or damages. A minimum wage law, for example, may differ in 
no respect from a joint agreement with a union, except that the one 
is enforced by legal penalties or the threat of penalties, and the other 
by a strike or the threat of a strike. 

The practical conclusion to be drawn from this distinction is that, 
since a State industrial commission may be both a mediator and a 
minimum wage commission, it should act only as a voluntary medi- 
ator where a union is actually in operation and securing agreements. 
But where there is no effective union there the minimum wage should 
apply. This is the condition of women and child workers, and for 
them the State, but not the Federal commission, should create ad- 
visory minimum wage boards, which, acting with the women inspec- 
tors of the commission, should make investigation and recommend 
the minimum wage and other conditions to the industrial commis- 
sion. The last named would then hold public hearings and the rules 
of law would apply as already outlined in preceding paragraphs. 

The same principle applies to other labor legislation which regu- 
lates the individual labor contract, such as child labor laws, work- 
men's compensation, safety, health, employment offices, legal aid, 
mechanics' liens, and so on. These are matters which are not usually 
an issue in collective bargaining even of unions composed of men, 
and do not usually lead to strikes or lockouts. Neither is the indi- 
vidual workman, in making his contract of employment, able to 
protect himself in these matters. When government here comes to 
the aid of the weaker party to the wage bargain, it is not usually inter- 
vening in the field of collective bargaining. The situation is different 
in matters of wages, hours of labor, and shop rules which govern the 
manner of work, dismissals, promotions, and so on. Where unions 
show themselves strong enough to protect individuals in these matters 
the function of government should, as far as possible, be limited to 
voluntary mediation. 

It doubtless has appealed to some people who consider the em- 
ployer's position more powerful than that of the union, that the 
employer should be compelled in some way to deal with unions, or at 
least to confer with their representatives. But, if the State recog- 
nizes any particular union by requiring the employer to recognize it, 
the State must necessarily guarantee the union to the extent that it 
must strip it of any abuses that it may practice. The State might 
be compelled to regulate its initiation fees and dues, its apprentice- 
ship ratio, its violation of agreements, and all of the other abuses on 
account of which the employer refuses to deal with it. This is exactly 
what is done through compulsory arbitration, and there is no place 
where the State can stop if it brings compulsion to bear on the em- 
ployers without also regulating by compulsion the unions. If so, 
the whole question is transferred to politics, and the unions which 
attempt to use a friendly party to regulate the employer may find a 
hostile party regulating them. We believe that collective bargaining 
and joint agreements are preferable to individual bargaining, and 
we believe that the general public should support the unions in their 
efforts to secure collective agreements. But this can only be done 
through the influence of public opinion without the force of law. 
It is based on the conclusion that tw r o opposing organizations, equally 
strong, are able to drive out abuses practiced by the other. This is 


very different from recommending that the Government should step 
in and drive out the abuses. 

This conclusion and recommendation in favor of voluntary media- 
tion is based also, in part, as already stated, on the distinction 
between collective bargaining and the individual labor contract. 
While Government for the past 80 years has been wisely interfering 
more and more with the individual labor contract, through child 
labor laws, wage payment laws, mechanics' liens, workmen's compen- 
sation, and so on, for the benefit of the weaker party, yet in matters 
of governmental interference with collective bargaining, we have to 
deal with great organized, hostile interests that are capable of using 
their power in the politics of the country, in the administration of 
labor laws, and even in the courts of justice. Any interference with 
their collective bargaining power forces them to get control, if possi- 
ble, of the political parties or the executive and administrative 
officials, or the courts, that interfere. The result is more far-reaching 
and destructive than the mere decision one w T ay or another in a 
particular dispute. It tends to corrupt or to discredit or to make 
inefficient the Government itself. This country is so large, with such 
extremes of sectional interests, with industrial and class interests, 
with nationality and race interests, and with such extremes of wages 
and costs of living, that it is an easy matter for these powerful organ- 
ized interests to make alliances with others for the appointment or 
control of officials. When this is done, neither side can have confi- 
dence in the mediators or arbitrators who are chosen without their 
consent. A system, even though compulsory only in part, is likely to 
break down after a few decisions which are resented by either side. 
The department or commission responsible for the decision loses 
confidence and therefore usefulness. For this reason the weakest part 
of our recommendation is that the mediator shall appoint the third 
party to a voluntary board of arbitration or a voluntay board of 
investigation in case the two parties can not agree. It seems neces- 
sary that some authority be given that power. But the mediator is 
likely to lose the confidence of the side that loses in an arbitration, 
since he will be held responsible for the arbitrator whom he ap- 
pointed. This might incapacitate him for future mediation. But we 
can think of no other agency that would be acceptable to both sides. 
If the ma} 7 or, or the governor or the President appoints the third 
man, employers would object. If the courts were to appoint him the 
unions would object. We are forced to recommend that this authority 
be given to the mediator, but we propose that he should not be tied 
down to any procedure that would prevent him from devising any 
system that his ingenuity might suggest rather than fall back on his 
precarious power of appointing the odd man. 

After considering all forms of governmental compulsion in col- 
lective disputes and even admitting their partial success in other 
countries, w r e conclude that, on the whole, in this country as much can 
be accomplished in the long run by strictly voluntary methods as by 
compulsory methods of avoiding strikes and lockouts. It can not be 
expected that strikes and lockouts can be abolished altogether. Even 
countries with compulsory systems have not succeeded in preventing 
all of them. In our country, the voluntary method in collective bar- 
gaining avoids the much more serious evil of discrediting the agencies 
of Government which must be looked to for impartial enforcement of 


laws affecting the individual labor contract. It is to the enactment 
and enforcement of laws protecting laborers as individuals that we 
must look for the removal of underlying causes of industrial unrest 
and for the eventual reduction of strikes that now spring from the 
cumulative abuses that individuals suffer without other effective 
remedies. But the removal of these abuses can not be accomplished 
without the efficient and nonpartisan administration of laws, and this 
is the main purport of our recommendation for industrial commis- 
sions to regulate the individual labor contract. 


15. Congress and the State legislatures to enact laws similar to the 
British trades disputes act of 1906, relieving employers' associations 
and labor unions, as well as their members, officers, or agents, when 
acting in their behalf, of criminal suits, damage suits, and injunctions 
on account solely of combination or conspiracy connected with a labor 
dispute, when the act would be lawful if clone by one person. Such 
laws would permit the use by either side without legal penalty of 
its weapons of closed union shop and closed nonunion shop, of strike 
and lockout, boycott and blacklist, peaceful picketing and strike- 
breaking, peaceful inducement to break a contract to work or to break 
off allegiance with a union, in pursuance of an effort to win a labor 
dispute. The law would not prevent prosecutions for conspiracy 
where the act if done by one person would be a crime. We copy 
below sections of the British trades disputes act as indicating the 
kind of legislation which with modifications to suit American laws 
would probably reach these objects: 

Conspiracy. An agreement or combination by two or more persons to do or 
procure to be done any act in contemplation or furtherance of a trade dispute 
between employers and workmen shall not be indictable as a conspiracy if such 
an act committed by one person would not be punishable as a crime. * * 
An act done in pursuance of an agreement or combination by two or more per- 
sons shall, if done in contemplation or furtherance of a trade dispute, not be 
actionable unless the act, if done without any such agreement or combination, 
would be actionable. 

Damages. An action against a trade-union, whether of workmen or masters, 
or against any members or officials thereof on behalf of themselves and all other 
members of the trade-union, in respect of any tortious act alleged to have been 
nmii'.iitUMl by or on behalf of the trade-union, shall not be entertained by any 

lir<nt-ii of contract and interference with business. An act done by a person 
in contemplation or furtherance of a trade dispute shall not be actionable on the 
ground only that it induces some other person to break a contract of employ- 
ment, or that it is an interference with the trade, business, or employment of 
some other person or with the right of some other person to dispose of his 
capital or his labor as he wills. 

Picketing and sabotage. It shall be lawful for one or more persons, acting 
either on their own behalf or on behalf of a trade-union or of an individual 
employer or firm in contemplation or furtherance of a trade dispute, to attend 
at or near a house or place where a person resides or works or carries on busi- 
noss or happens to be, if they so attend merely for the purpose of peacefully 
obtaining or communicating information or of peacefully persuading any person 
to work or nlistain from working. 

Every person who, with a view to compel any other person to abstain from 
doing or to do any act which such other person has a legal right to do or abstain 
from doing, wrongfully and without legal authority 

1. Uses violence to or intimidates such other person or his wife or children 
or injures his property ; or, 

2. Persistently follows such other person about from place to place ; or, 


3. Hides any tools, clothes, or other property owned or used by the other per- 
son or deprives him of or hinders him in the use thereof ; or, 

4. Watches or besets the house or other place where such person resides, or 
works, or carries on business, or happens to be, or the approach to such house 
or place; or, 

5. Follows such other person with two or more other persons in a disorderly 
manner in or through any street or road, 

shall, on conviction thereof by a court of summary jurisdiction, or an indict- 
ment as hereinafter mentioned, be liable either to pay a penalty not exceeding 
20, or to be imprisoned for a term not exceeding three months, with or with- 
out hard labor. 

It is apparent from all the preceding recommendations that the 
creation of industrial commissions with advisory councils, depends 
for its success on the permanency of organizations of employers and 
organizations of laborers. It is only as we have organizations that 
we can have real representation. The preceding recommendations 
are designed, through salaried positions for civil service appointees 
and unsalaried positions for the representatives of organizations, 
to keep the latter continuously responsible to the organizations that 
elect and recall them. For this reason any policy of Government 
that tends to destroy the organizations or to compel them to hide 
their operations in secrecy tends to weaken the basis upon which im- 
provement in the enactment and administration of labor law must 
be based. Such a policy is that which permits employers to collect 
damages, and in a lesser degree to secure injunctions against unions 
without at the same time effectually permitting unions to bring 
similar proceedings against employers' associations. The decision 
in the case of the hatters' union (208 U. S., 274) awarding heavy 
damages for boycotting against practically all members of the local 
union, will make it possible to collect damages in all cases where an 
unlawful conspiracy is shown. Since damages arise from all strikes 
and boycotts, there is no conceivable limit to which suits for dam- 
ages can be brought. The result must be the weakening or destruc- 
tion of unions or driving them into secrecy and a more generally 
avowed policy of violence. 

This policy also brings the courts into the field of collective bar- 
gaining, and necessarily leads, sooner or later, to the efforts of both 
sides to control the judicial as well as the administrative and legis- 
lative branches of Government. Just as our earlier recommenda- 
tions were intended, in part, to take the administration of labor law 
out of the hands of either side and to make it a joint affair, so this 
recommendation is intended, in part, to relieve the courts of similar 
partisanship in matters of collective bargaining. It is believed that 
strong organizations of employers and employees are much more 
capable than the courts of holding each other in check and prevent- 
ing abuses on either side. The recommendation is intended to 
recognize the collective weapons of both sides as the means of secur- 
ing this result, and yet, through the Industrial Commission and its 
advisory council, including mediators and the efficient enforcement 
of labor laws, to minimize the necessity of resorting to these weapons. 

The so-called Clayton Act of 1913 was supposed by some lawyers 
to accomplish the result intended in the foregoing recommendation, 
but other lawyers contend that the law of conspiracy has not been 
changed by the act. At any rate, the law does not apply to the 
States, only one of which, California, has adopted a similar law, and 


another, Massachusetts, has withheld adoption owing to an unfavor- 
able reply by the Supreme Court on the question propounded by the 
legislature. It is admitted that the British act accomplishes the 
intended purpose, and consequently we take it as the model in case 
these other acts are found, under court decisions, not to do so. 

The recommendation is, as already said, intended to prevent the 
courts from interfering with the collective weapons, provided they 
are peaceful, that either side uses to defeat the other side. It is rec- 
ognized, of course, that these weapons are coercive and are intended 
to be coercive, but they are not coercive in the sense of physical 
violence. They are coercive only in the sense that numbers of people 
acting together to do an act lawful for each separately have more 
power over individuals than a single individual acting by himself 
would ordinarily have. But even an individual acting alone may 
have the same kind of coercive power, which in his case would be 
lawful, as, for example, when an employer compels a union man to 
give up his membership in a union by threatening to discharge him 
if he does not. This kind of individual coercion is held to be entirely 
lawful, and any State or Federal statute which prevents the em- 
ployer from using such coercion is unconstitutional. This is so even 
if the employer is a corporation with thousands of stockholders and 
bondholders, for the corporation is held to be, for that purpose, not 
a conspiracy, but a single person. By declaring laws unconstitu- 
tional which attempt to deprive the employer or corporation of the 
right to discharge a man on account of his unionism, the court steps 
in to prohibit the State from depriving the employer of a coercive 
weapon used to defeat the union. It prohibits a State from depriv- 
ing an employer of the closed nonunion shop as a coercive weapon 
against unions. 

A counterweapon which the union has is the closed union shop. 
If the employer discharges or threatens to discharge one of his 
employees on account of his membership in a union, the only effective 
weapon that the employee may have, in order to retain his member- 
ship, may be a strike or the threat of a strike by his union to compel 
the employer to discharge all nonunion men. In some States a strike 
for such a purpose, under the decisions of the courts, is unlawful, 
on the ground that it is a conspiracy to compel the employer to give 
up his right to employ whom he pleases, or a conspiracy to deprive 
the nonunion man of his right to work for whom he pleases. The 
foregoing recommendation is intended to make it plain that no 
employer or union of employers shall be prevented by law or by a 
court from running a closed nonunion shop if he can, and no union 
shall be prevented from compelling him to run a closed union shop 
if it can, so long as the method would be lawful for a person not 
backed by a union. 

In a similar way it is lawful for an employer to furnish other 
employers, whether members of his association or not, with informa- 
tion as to whether an employee is a member of a union or a union 
agitator, and to file such information in the employment bureau of 
an employers' association. If the workman can not prevent his em- 
ployer by law from discharging him on account of unionism, much 
less can he require another employer to hire him. It is lawful also 
for an employers' association to expel a member who refuses to com- 
ply with a nonunion rule, and, except in case of a public utility, to 


refuse to deal with him or to discriminate against him. Further-' 
more, since other employers' rights of furnishing information to 
fellow employers are so great, it is practically impossible to get proof 
that they contain the malicious purpose which constitutes a blacklist, 
and statutes preventing employers from using some of these legal 
rights have been held unconstitutional. But, as a rule, the employers' 
blacklist does not need to go to these extreme measures permitted by 
law, because it is effective short of these measures. 

The case is different with the union's weapon, the boycott. To 
carry out a boycott the union must circulate " unfair lists " and must 
induce as many persons as possible to withdraw their patronage. 
The courts distinguish between the primary boycott and the sec- 
ondary boycott. The former is perhaps legal in some cases, just as 
a strike is legal, for it is merely the refusal to patronize an em- 
ployer on the part of the same persons, or their fellow unionists, 
who have struck against the employer, or who are locked out or 
blacklisted by him or his association. It is doubtful, though, 
whether this primary boycott is legal if it extends to members of 
unions other than the one directly injured. The American Federa- 
tion of Labor, for example, can not carry out a primary boycott on 
goods which the hatters' union has boycotted, since it is prohibited 
from publishing the information. And even the strike and the 
primary boycott are sometimes unlawful if the court holds that the 
purpose or the means are unlawful. The courts will not directly 
enjoin either a strike or a primary boycott. They can not compel a 
man to work or to purchase. But they can make the unlawful strike 
or primary boycott ineffective by enjoining even peaceful picketing 
or persuasion, or the circulation of " unfair lists " designed to notify 
others that the boycott is on. 

But the secondary boycott is generally held illegal because it is 
an additional boycott placed upon a third party, usually a merchant, 
who continues to sell the goods of the boycotted employer. As to 
this third party the boycott is primary, and he can secure an injunc- 
tion or damages on the ground of conspiracy to injure him without 
just cause, or to compel him to break a contract, if he considers the 
damage to himself worth while. But boycott suits are not often 
brought by third parties, either because the damage to them is 
usually slight, since they only need to patronize other manufac- 
turers whose goods the boycotters are willing to buy, or because the 
courts protect them through suits brought by the party originally 
boycotted. The employer originally boycotted would not secure 
protection if he depended on a hundred or a thousand boycotted 
merchants not seriously concerned to bring separate suits. Con- 
sequently the vast majority of boycott cases are brought by the per- 
son primarily boycotted, in order to prevent the spread of boycotts to 
other persons who deal with him; in other words, to prevent a sec- 
ondary boycott against himself. The boycotted employer hides be- 
hind the alleged injury done to third parties in order to get damages, 
not for them, but for himself, as in the case of the Loewe Co. against 
the hatters' union. The ground of action is not injury to third par- 
ties, but interference with the employers' right to have free and 
uninterrupted business dealings with all who wish to deal with him. 
This does not seem to be equal treatment of the employers' blacklist 
which interferes with the unionists' right to have uninterrupted 


access to all employers, and the employees' boycott which interferes 
with the employers' right of access to the commodity market. 

The arguments now used to declare the secondary boycott illegal 
are those formerly used to declare the strike and the primary boycott 
illegal. Our recommendation simply carries forward another step 
the effort to secure equality between organized capital and organized 

Of the other weapons, the strike and lockout, the employers' asso- 
ciation does not usually employ its weapon, because it can force the 
union to strike or yield, but the strike is illegal if the purpose is 
illegal, such as the purpose in some States of securing a closed union 
shop. The recommendation is intended to remove all illegality from 
the strike. 

This recommendation is intended to do away with the doctrine of 
conspiracy for both employers' associations and labor unions, except 
in so far as the conspiracy is one to commit what would be a crime 
for one person, and to do away with all suits for damages, including 
injunctions to prevent damage, against a union or against its mem- 
bers when acting for the union, except suits for damages against 
conspirators to commit a crime. 

The doctrine of conspiracy is based on the undoubted fact that, 
while a lawful act done by only one person may be coercive and cause 
damage, or be intended to cause damage, yet the coercion and damage 
are ordinarily so small, compared with the social advantage of liberty 
to do as one pleases, that, except in breach of contract, the court does 
not entertain a suit at law for damages or for prevention of the coer- 
cion that causes damages. Yet the same lawful act, if done by agree- 
ment between two or more persons, may reach a point of coercion 
where the damage, compared with the social advantage of liberty to 
combine with others, is so serious that the agreement becomes un- 
lawful. Therefore, those who enter into an agreement to do an act 
which would be lawful without the agreement, or their agents, may 
be prosecuted for damages or may be prevented by injunction from 
using the coercive power of numbers to cause the damage. It is this 
doctrine of conspiracy, or coercion through mere numbers, that is 
sought to be removed by the recommendation. Individuals and the 
individual members of unions who conspire with them would con- 
tinue to be arrested, prosecuted, and punished as individuals or con- 
spirators for all acts which are criminal for them as individuals, but 
no suit for damages could be brought against the union for acts 
committed by or on behalf of the union. 

In other words, the recommendation removes completely the doc- 
trine of civil conspiracy according to which damages may be col- 
lected or injunctions issued. It, however, retains the doctrine that 
all conspirators who join in procuring an act that is criminal for 
one person to do are likewise guilty with the person who does it. 
This might include all the members of a union if all were proven 
actuary to have joined in such a conspiracy. Those who conspired 
could still be prosecuted and sent to prison, as was done in the case 
of the officers and members of the structural iron workers for trans- 
porting dynamite. The recommendation is not intended to change 
the law in this respect. It would change the law in the hatters' case. 

Employers are already learning the ineffectiveness of the injunc- 
tion and the danger to themselves of throwing on the courts the 



burden of protection which they can as readily secure through their 
own organizations. With their advantages of position, both as 
owners of the means of livelihood and the possessors of the power of 
discharge and of blacklist of union members which goes with the 
ownership of property, they have a superior power over unions. 
Our recommendations do not grant employers' associations rights 
additional to those which they now enjoy in fact; they merely grant 
the unions corresponding rights. 

The British act also defines the kind of picketing that is criminal 
in that it is not peaceful, and thereby defines what is peaceful picket- 
ing. In these cases of illegal or criminal picketing and in the de- 
struction or damage to physical property those who have done the 
criminal acts and those who have conspired to have them done may 
be fined and imprisoned, but the union funds or the property of its 
members not proven to have joined in the criminal conspiracy could 
not be taken for damages. 

Without entering into further details, the object of the recom- 
mendation is to place unions and employers' associations upon an 
equal basis in the use of their competitive weapons. 

Regarding the constitutionality of this recommendation it should 
be noted that it takes both employers' associations and unions from 
under the operation of the antitrust laws. This differs from the 
Clayton and other acts which take only unions from under the anti- 
trust laws or common law and might be good ground for declaring 
these laws unconstitutional. The British act does this by distinguish- 
ing between employers as merchants or associations of manufac- 
turers, who sell commodities to the public, and whose bargain may j 
be called the " price bargain," and the same employers in the differ- 
ent function of dealing with labor, and whose bargain is the "wage 
bargain." The employers, in their function of merchants and manu- 
facturers, or sellers of products or commodities to consumers or the 
Sublic, continue to come under the antitrust laws, and the Interstate 
ommerce Commission, the Federal Trade Commission, and the State 
public utility commissions have been created for the purpose of pro- 
tecting the public against them as such. These commissions regulate 
price bargains for commodities or products, between corporations 
and consumers. 

But it does not follow that even the same employers when organ- 
ized to regulate the wage bargain with employees should be treated 
as a conspiracy or trust. They perform a very different function 
and public policy is very different. In the case of the price bargain 
the public is interested in securing low prices, but in the case of 
wage bargain it is interested in permitting high wages. Yet the 
public needs protection against abuses of labor unions as it does 
against the abuses of trusts. The employers' association stands be- 
tween organized labor and the public just as the railroad and public 
utility commissions and the trade commission stand between mer- 
chants' or manufacturers' associations and the unorganized public. 
But the employers' associations are a better protection to the public 
against the abuses of unions than are the courts. Labor leaders who 
wish to keep discipline in tTieir unions and the observance of joint 
agreements realize that they can not do so unless confronted by a 
strong employers' association. They realize that continued abuses 
lead eventually to the destruction of their unions. An employer who 


stays out of his organization is as culpable as a laborer who stays out 
of "his union. Employers should organize 100 per cent just as the 
unions endeavor to reach that mark. 

It would, therefore, seem to be proper and constitutional classifi- 
cation in the interest of public policy to treat manufacturers under 
a law prohibiting or regulating trusts and public utilities and to 
treat the same persons as employers under different laws, like those 
of mediation and trade disputes, where both employers' associations 
and trade-unions are given immunities for the use of peaceful coercive 
weapons which they do not possess under the antitrust laws. 


16. Considerable attention has been given by this commission to 
the largest foundations or endowments now in the hands of private 
trustees. Any proposed legislation on this subject should be pre- 
ceded by a complete investigation of all foundations and endow- 
ments, else the law would have effects not contemplated by the legis- 
lature or Congress. Such an investigation would include all en- 
dowed charities, endowments of religious organizations and uni- 
versities and colleges. We are informed that such investigations have 
been made in England and France, resulting in legislation. The in- 
vestigation should be complete, covering all aspects of the question 
and bringing out both the advantages and the disadvantages of such 
foundations and endowments. The legislature could then act intelli- 
gently on the subject. 

We are convinced that many of these endowments in private hands 
have a beneficial effect on the work of State and governmental insti- 
tutions. Large private universities have set the example and stimu- 
lated the States to support and enlarge their State universities. 
Some of the investigations and reforms started by recent large foun- 
dations have already induced Congress and administrative depart- 
ments to enter the same field and to extend it. In fact, almost every- 
thing that Government now does was done at first through private 
initiative, and it would be a misfortune if private endowments, unless 
plainly shown to have committed abuses, should be prohibited. Even 
their abuses can be rectified by the legislature through its control 
over charters, if reasonable ground can be shown. But it is better, 
for the most part, that they should go on at their own initiative in 
order that the people through their Government may see the value 
of their work and then take it up and extend it more widely than 
the private foundations are able to do. It is largely for this reason 
that we recommend a "Federal fund for social welfare" (par. 18), 
in order that the Nation may compete with or displace private 
foundations in this vital matter. 

However, experience has abundantly shown that there should be 
no alliance between these private foundations or endowments and 
the Government. The State or Government should neither subsidize 
them nor be subsidized by them, nor cooperate with them. Such co- 
operation has often led to public scandal. Instead of subsidizing 
private charity the State should use its money to displace it by better 
and more universal charity. Instead of calling upon private founda- 
tions for help, the Government should treat them as competitors. 


No effort on the part of Government officials to secure financial as- 
sistance from them should be allowed. 


17. The Federal commission to have charge of all subsidies 
granted to the States for the promotion of industrial education, 
safety, employment offices, and other matters, as Congress may de- 
termine. The commission to meet the expenses of State officials when 
called together for conferences on standards and uniformity. Sub- 
sidies to be granted on condition that the standards are maintained. 

The Public Health Service now has authority to call conferences 
of State health officials and to meet their expenses. The same power 
should be given to the proposed industrial commission. A large part 
of the work of the commission will be the field work of advising 
State officials as to the best methods of administration. This kind of 
work is now done by the Department of Agriculture and the Public 
Health Service. 

Subsidies are recommended in certain cases because the State 
governments are not in position to secure adequate funds and as an 
inducement to bring their standards up to the standards formulated 
by the Federal commission. 

(Funds for this purpose are recommended in paragraph 18.) 


18. A Federal inheritance tax on all estates above $25,000, begin- 
ning at 1 per cent on the excess above $25,000 and rising to 15 per 
cent on the excess above $1,000,000 for the class of direct heirs, such 
as wife, children, and parents. Higher rates for more remote rela- 
tives and strangers. The Federal inheritance tax to be a supertax, 
added upon the existing rates assessed by the States. Provision, 
however, to be made that any State which repeals all inheritance tax 
laws, or refrains from enacting them, shall receive from the Federal 
Government, say, 50 cents per capita of its population per year. The 
administration "and collection of this tax to be placed in charge of 
present assessors and collectors of income taxes, who already collect 
income taxes on estates in the hands of executors. Kevenues derived 
from inheritance taxes to be placed in trust with the Federal Reserve 
Board for investment in securities approved by Congress. The fund 
to be known as " Federal fund for social welfare." Expenditures of 
income derived from such securities to be made under the direction 
of the Federal industrial commission for such purposes of industrial 
and social welfare as Congress may authorize. Should the income 
from investments not be adequate to meet the authorized expendi- 
tures, further investments to be withheld and the principal to be 
expended. Revenues derived from activities of the commission, such 
as head tax on immigrants, etc., to belong to the fund. Also unex- 
pended balance to be held in the fund for disposition by Congress. 

A similar fund collected from immigrants in excess of the ex- 
penses of the service is held with accruals for disposition by Con- 


We have previously shown the need of improved administration 
in providing for any future program of social legislation. We have 
held that it is useless to undertake any additional labor legislation 
if effective, nonpartisan machinery of administration is not pro- 
vided, but even with such machinery it can not be expected that the 
expense of government will be reduced. In fact, the expenses will 
be increased, and no legislation should be attempted unless the possi- 
bilit}^ of getting these revenues is fully considered. 

Moreover, these revenues must be continuous, else the whole pro- 
gram will be liable to sudden breakdown through failure of funds. 
Hostility to labor laws is just as effective when it succeeds in killing 
appropriations, on the ground of economy, as when it defeats the 
law itself. 

Already the increased expense of administration of labor laws is 
bringing active and effective protest. The greatest leap in this ex- 
pense has come with workmen's compensation. So far as this increase 
is due to inefficiency of the existing political and partisan methods 
of administration the protest is valid. The remedy consists in im- 
proving the efficiency and eliminating the partisanship, and this is 
the purport of what we have previously said. So far, also, as the 
increase places excessive burdens of taxation on the already burden- 
some taxes of the people, the protest also is valid. But here the 
remedy consists in discovering new sources of revenue that will not 
be burdensome. 

A Federal inheritance tax, partly distributed to the States, seems 
to be the most appropriate method of securing these new sources 
of revenue. The principal underlying cause of social unrest is the 
uncertainty of income of wage earners and small producers. A 
steady, continuous income, even though it be small in amount, is of 
more importance than high wages or earnings at certain times and 
no earnings at other times. This uncertainty of income is the main 
cause of the dependence, inequality, and oppression which produce 
conflicts between capital and labor. 

The great majority of wage earners can not provide in advance 
for future contingencies when they will get no income. These con- 
tingencies come from accidents, sickness, invalidity, old age, death, 
unemployment, and the lack of industrial education. 

There are two main reasons for this inability to provide for con- 
tingencies: (1) Inability in bargaining for wages to take into account 
future contingencies and future cost of living. The w^age earner may 
be able when bargaining to get enough wages for current cost of liv- 
ing, but he does not include insurance premiums in his notion of 
current cost, except so-called " industrial insurance " to provide for 
funeral expense. (2) Lack of thrift and habits of saving, owing in 
part to their own fault and in part to the contingencies which eat 
up their savings and bring discouragement. In either case, under 
competitive industry, the condition may be accepted as permanent. 

On the other hand, employers and investors are much more able to 
provide in advance for a future continuous income against contin- 
gencies. All investments are made with reference to equalizing the 
flow of income over a future period of time in the form of interest or 

Inheritances are the principal means by which owners, without 
effort or thrift on their part, secure titles to wealth and its future con- 



tinuous income. Consequently, for the Government to take a part of 
large inheritances which provide continuous incomes and to devote 
the proceeds to the purpose of making incomes more nearly continu- 
ous for those who are not able, under existing conditions, to do it for 
themselves appeals to the sense of justice. It may be accepted in 
advance that men of wealth will approve of an inheritance tax on two 
conditions, namely, that the tax will be devoted to a great public 
purpose, and that the funds will be administered economically and 
efficiently without partisanship or practical politics. These two con- 
ditions are essential and are contemplated in our recommendations 
for a Federal industrial commission and a Federal fund for social 

Some of the purposes for which this fund might be used, in order 
to meet the object of social welfare, are, in addition to the overhead 
expenses of the commission, the safety and health agencies of the 
Federal Government and, perhaps, subsidies to States conforming to 
standards ; industrial education and subsidies to States ; Federal em- 
plo3 r ment offices and subsidies to States which adopt an approved 
plan coordinating with the Federal plan; Federal supervision of 
private employment offices doing interstate business; investigation 
and statistics of labor conditions; mediation; administration of im- 
migration laws ; workmen's compensation and subsidies to systems of 
sickness, unemployment, and other forms of social insurance as may 
be approved by Congress. Opportunities for investment should be 
considered, such as workmen's houses, workmen's hotels, hospitals, 
rural-credit associations, and similar investments made by Germany 
in respect of its various insurance funds. 

It is impossible to estimate at this time the revenue that would be 
derived from such a tax. We have estimated the amounts now col- 
lected by the States from inheritance taxes at $25,000,000, as against 
the $50,000,000 that they would receive at 50 cents per capita, The 
present systems in vogue in 32 States yield revenues from $1,096 in 
.Wyoming to $11,162,478 in New York. The amount per capita of 
population ranges from 1 cent per capita in Texas and Wyoming to 
59 cents in Connecticut, 66 cents in Illinois, 68 cents in Massachu- 
setts, and $1.28 in New York. The latter four States w r ould lose if 
they abolished their inheritance tax and accepted the Federal dis- 
tribution of 50 cents per capita. Other States would gain. Yet this 
can not be considered a just criticism of the proposal, for the States 
which lose are those in which wealthy people choose to reside and 
yet their fortunes arise from ownership of property scattered 
throughout the country. The present system of State inheritance 
taxes practically permits a few States to collect taxes on property 
whose value is created by many of the States. A Federal inheritance 
tax is the only method by which the entire Nation, which contributes 
to the value of estates, can secure revenues from the values which it 

The recommendation of returning 50 cents per capita to the States 
is designed to induce them to turn over to the Federal Government 
the sole right of imposing inheritance taxes and yet to preserve to 
the States at least a part of such preempted claims as they may have 
acquired by getting into the field first. 

The Federal machinery is already in existence for collecting in- 
come taxes, and the same officials, without any appreciable increase 


in the number, can assess and collect inheritance taxes. Executors 
of estates whose annual incomes amount to $2,500 or more per year 
are now required to make returns to collectors of internal revenue, 
and the only addition required for an inheritance tax is that executors 
of estates of $25,000 should make returns of the total value of the 
estates. This can, of course, be done at the same time when they fill 
cut the blanks which show net incomes. Internal-revenue officials 
also investigate all cases where it is suspected that full returns of 
income are not made. No additional officials are therefore required 
for these purposes. The only addition would be such number of 
officials as are required for general supervision. The machinery is 
already in existence, and no tax can be so cheaply administered as a 
Federal inheritance tax. 

The significant feature of the proposed inheritance tax is the 
high rates on direct heirs, as compared with the very low rates im- 
posed in the States. The estates going to wife and lineal heirs in- 
clude probably 80 per cent to 90 per cent of all estates, and it is 
therefore from such estates that the largest revenues are expected. 
Such estates are scarcely touched by American inheritance tax laws. 
The sensationally high rates imposed in some States on estates going 
to strangers and remote heirs are something of a delusion, for 
scarcely 5 per cent of the estates go to such beneficiaries. The rates 
on estates going to strangers reach their highest figure at 35 per 
cent in California on the excess over $1,000,000 and fall as low as 5 
per cent in Pennsylvania and other States. But the rates on the ex- 
cess over $1,000,000 going to direct heirs is only 10 per cent in Cali- 
fornia and falls to 1, 2, or 3 per cent in most of the States. Our 
recommendation affects mainly these estates going to direct heirs, 
which are 80 to 90 per cent of all estates, and the highest rate on 
such estates is 15 per cent on the excess over $1,000,000. This con- 
forms more nearly to the inheritance taxes of leading European 
countries which would yield according to various estimates over 
$200,000,000 if adopted by the Federal Government of this country. 

The following administrative reasons for making the inheritance 
tax a Federal tax are submitted by Prof. T. S. Adams, of the Wis- 
consin tax commission, who also suggests the repayment to States 
as a method of inducing them to yield to the Federal tax. He says : 

1. The present system gives rise to a large amount of double or multiple 
taxation and if the existing laws were enforced, the situation would be un- 
bearable. Most State laws tax the transfer of all securities owned by resident 
decedents and yet attempt to tax the transfer of some securities owned by non- 
resident decedents when they represent property in the State passing the 
law. I have known one block of railroad stock to be assessed in Wiscon- 
sin (residence of decedent), in Illinois (where the stock was deposited in a 
trust company), and in Utah, where the railroad was incorporated, and it is 
not unlikely that other States through which the railroad passed imposed a 
tax before the estate was finally settled. Four different and conflicting taxes 
are thus in use at the present time. 

2. At present administration of such laws is costly, ineffective, unjust, and 
capricious. Wisconsin attempts to tax the transfer of all securities represent- 
ing, however indirectly, property in Wisconsin. It is impossible where 
holding companies hold the stock in the companies immediately owning the 
AVisconsin property. To enforce it, particularly where bonds are concerned, 
agents must be employed outside the State. We keep two in New York and 
Chicago. We should have an agent in every place in the country where estates 
are probated. To enforce the Wisconsin interpretation would cost an enormous 


3. Yet the Western States are insisting on the Wisconsin idea in inheritance 
taxation. As they do so, double taxation and cost of administration must in- 
crease greatly. Cost of administration has not been excessive in the past, 
merely because the laws have not been enforced. 

4. Except in a few States the yield of the inheritance tax is very irregular. 
The proposed commutation payment by the Federal Government would sub- 
stitute a regular for an irregular State revenue, besides greatly decreasing cost 
of collection or prospective cost of collection. 

5. Rich men change their rendezvous very easily. Rhode Island and a few 
other States do not tax inheritances at present. They do and can prevent the 
proper development of inheritance taxes in other States. It is the compulsion 
of the " twentieth man." 

6. A number of States can not employ progressive rating in inheritance tax- 
ation an essential attribute of sound inheritance taxation. 


19. Underlying the entire problem of self-government in this 
country, and placing a limit on the ability to remedy abuses either 
through politics or labor unions, is the great variety of races, nation- 
alities, and languages. We know how the Southern States have dealt 
with the problem and how constitutional amendments forced upon 
them by the Northern States have been treated. Considering this 
outcome, it is doubtful whether the additional proposed amendments 
designed to protect rights of individuals in those or other States 
would accomplish the ends intended. 

A similar problem is forced upon us by the large immigration of 
backward races or of classes from other countries with no experience 
in self-government. One of these races, the Chinese, has been actu- 
ally excluded from immigration. Others less competent are admit- 
ted. The doctrine of a haven for the oppressed has been rejected 
in the case of the Chinese and can not consistently be raised against 
restriction on immigration designed to accomplish a similar purpose 
of protection to Americans. Especially is the problem of the Ameri- 
canized element in the labor unions in maintaining discipline almost 
insoluble when it comes to dealing with 10, 20, or 30 races or lan- 
guages. The right of employers to bring aliens into their establish- 
ments is the same as their right to bring in naturalized or native 
Americans. The resulting situation is the great strikes recently en- 
tered upon without previous organizations or discipline by nation- 
alities that have suddenly come together, notwithstanding their 
racial antipathies and language impediments, on account of a united 
antagonism against their employers. Such strikes receive but little 
consideration from American police, sheriffs, and militia and are 
usually defeated. On account of their incapacity for self-govern- 
ment, it might perhaps be shown that in isolated communities the 
paternal despotism of a corporation is preferable to unionism or 
political control by these backward nationalities. The violation of 
contracts and inability of their leaders to maintain discipline and 
observe contracts, which make some American employers so deter- 
mined against recognizing unions, may often be traced back to the 
unruly mixture of races and nationalities whom they have employed. 
Other problems, such as those of the political franchise, must be 
taken into account in any measure designed to further restrict immi- 
gration, but we are convinced that very substantial restrictions on 
immigration, in addition to the present restrictions, should be 

38819 16 15 


adopted, and that comprehensive measures should be taken to teach 
the English language and otherwise "Americanize " the immigrants. 
One of the principal services of American trade-unions is their work 
in teaching immigrants the practice of democratic government. They 
might almost be named as the principal Americanizing agency. An- 
other promising measure is the so-called social center, designed to use 
the schoolhouses and public buildings for instruction and discussion 
outside school hours. Such a measure, if adopted by all States, as 
has been done by some, w r ould be of advantage also to native Ameri- 
cans in the free discussion of public questions. 

Since immigration is one of the principal issues between capital 
and labor, its administration should be turned over to the proposed 
Federal industrial commission, where capital and labor will have an 
equal voice. This would place all administrative positions in the 
service, up to and including the Commissioner General, under the 
civil-service rules proposed in paragraph 3. In 1905, when a trade- 
union man was Commissioner General, he was required by the ad- 
ministration to give written or oral instructions to inspectors not 
to make any arrests of Chinese for deportation as required by law. 
(Washington file, 15427 1C.) Instead of resigning and making 
public protest he yielded and gave the required instructions, which 
practically nullified the law by preventing the deportation of smug- 
gled Chinese. Had such orders been required to be submitted to the 
advisory council, as proposed in these recommendations, a public 
protest would have been made by the labor members of the council, 
since they would be responsible to their unions and not to the Gov- 
ernment for their salaries. Even now, with the many charges of 
Chinese smuggling, the presence of unsalaried labor representatives 
on an advisory council, with the right to have access to all the records 
and to have all orders submitted to them before issuing, would place 
them in a position to prevent such secret violations of the law. In 
addition they would receive through their fellow-unionists through- 
out the country complaints or evidence against inspectors supposed 
to be in conspiracy with Chinese smugglers and would be in position 
to present their charges and to require investigation and removal 
if necessary. Various outside commissions, including this commis- 
sion, have been required to investigate the matter of Chinese smug- 
gling, but they are baffled. The advisory council proposed would be 
a continuous commission not terrified by any political administration 
and having a voice in the appointment and removal of inspectors 
under civil-service rules. (See par. 3.) Doubtless appeals from the 
commission to the Department of State and the President should be 
allowed in cases involving political refugees and the interpretation 
of treaties with foreign countries. These are substantially pur con- 
clusions derived from the attempted investigation of Asiatic smug- 


^ 20. One of the growing evils to be feared is the increasing conges- 
tion of populated centers at the expense of the rural districts. This 
is true not only of America but also of Europe. The allurements of 
the city tend to draw annually thousands from the country to the 
city. Congested cities, especially in hard times, mean enlarged ranks 
of the unemployed. 


This tendency is strengthened where the struggle of the small 
farmer not only to hold on to his land but to make a living becomes 
hopeless and where the conditions are such that the farm laborer or 
the farm tenant sees little or no possibility of becoming a future 

Not least among the causes of higher cost of living has been the 
tendency to increase city populations at the expense of agricultural 
populations, thus decreasing relatively the supply and increasing the 
demand and thereby inevitably raising the cost of food. 

The last census shows that we are becoming the victims of increas- 
ing absentee landlordism and farm tenancy. It points out that 
while the number of farm owners during the preceding decade in- 
creased 8 per cent, the number of farm tenants increased 16 per cent. 
If this ratio should continue for a few more decades, many parts of 
our Republic will find themselves in the condition from which Ire- 
land has so recently emerged. 

> For many generations Ireland was one of the most distressed 
countries in the world. All of its evils w T ere due primarily to 
absentee landlords and farm tenants. But within the last decade a 
wonderful change has taken place in the social and economic condi- 
tion of the Irish peasant, brought about by the enactment by Parlia- 
ment of what has since become known as the Irish land bill. This 
act created a royal commission, with power to appraise the large 
Irish land estates owned by absentee landlords, at their real and not 
at their speculative value, to buy them in the name of the Govern- 
ment at the appraised value, plus 12 per cent bonus, to cut them up 
into small parcels, to sell them to worthy farm tenants, giving some 
TO years' time in which to make small annual payments on the amor- 
tization plan, the deferred payments bearing but 3 per cent interest. 
In addition to this, the Government made personal loans to peasants 
sufficient to cover the cost of stock and farm implements, also pay- 
able in small annual installments bearing a minimum rate of interest. 
The Government further furnished the various farm districts with 
farm advisors, trained graduates from agricultural colleges, who act 
as friend, adviser, and scientific farm instructor to the peasants. 
Within a decade the wretched and more or less law-breaking farm 
tenant has been converted into an industrious, progressive, and law- 
abiding landed proprietor; in fact, he has become so law-abiding 
that many jails in the farming districts, formerly filled with agra- 
rian criminals, have been converted into public schools. 

In Texas this commission found a condition of farm tenancy like 
that of Ireland and seemingly typical of growing conditions in 
various parts of the country. We therefore recommend to Congress 
and to the various States that steps shall be taken to lighten the bur- 
dens of the small farmer, and make it more possible to encourage 
the tenant, farm laborer, and city dweller to become land proprietors. 

Not least among the burdens of the small farmer is the great diffi- 
culty, as a rule, on his part in obtaining the necessary credit with 
which to better and to improve his land, at a low rate of interest 
and under terms that will permit him to make payments spread over 
a long term of years. 

Under the rural credits system of Germany a small farmer can 
borrow his money as cheaply as can a great banker. Not only can 
he do this, but he can spread the payments over a period of 30 or 


more years. It is this system of rural credits, among other things, 
that has made it possible for the German farmer, despite the high 
price of his land, his heavy taxes, and his small acreage, ^not only 
to successfully compete with the American farmer, but to enjoy a fair 
degree of prosperity; so much so that in more recent times there 
have been comparatively few German agriculturists who have emi- 
grated to this country. 

We therefore recommend that Congress and the various States pass 
rural credit acts that will give to the small American farmer the same 
privileges and benefits that for so long a time have been enjoyed by 
the small farmers in Germany and other European countries, which, 
following Germany, have adopted rural credit systems. We recom- 
mend serious consideration to adapting the Irish land bill and the 
Australian system of State colonization to our American conditions. 
It is not our intention in this report to enter into minute details as 
to how this should be carried out In a general way, however, we 
believe it not only desirable but practicable for the Federal Govern- 
ment, through its Department of Agriculture, and the various States, 
through their departments of agriculture, to secure large bodies of 
land at appraised actual values, that have been thoroughly tested by 
experts for their quality, issuing bonds for the payment for same, if 
need be, and to cut them up into small parcels, making the necessary 
improvements and selling them to qualified colonists with small first 
payments, making the balance payable in, say, 30 years on the 
amortization plan, the deferred payments bearing only the same rate 
of interest that the Government itself is called upon to pay, plus a 
small addition to cover the cost of Government administration. We 
believe in this way the most effective check can be created, on the one 
hand, to minimize farm tenancy and, on the other hand, to make it 
possible for the farm laborer and the farm tenant to become land 
proprietors. We believe that this, if carried out wisely and intelli- 
gently, will have a large share in minimizing industrial unrest and 
in adding to the wealth of the Nation, both materially and in the 
quality of its citizenship. 


21. Corporation control over politics and labor has for a long time 
been a well-known matter of serious concern in all American States. 
This commission has held hearings on the subject of such control in 
isolated communities at Lead, S. Dak., Butte, Mont., and in Colorado, 
and other communities were partly investigated by a member of 
the staff. 

In Lead we found a strong union had recently been driven out 
on account of its sudden demand for the closed shop, and this was 
followed by a paternal absolutism that controlled labor, business, 
and politics. In Butte we found a strong union split into factions 
and destroying its own property, followed by refusal of the corpora- 
tion to deal with either faction. In Colorado we found a long his- 
tory of refusals to deal with unions, accompanied by strikes at inter- 
vals of 9 or 10 years. In each of these cases the ownership and con- 
trol of the property was in the hands of absentees, who left the oper- 
ating management to executives on the ground. 

We condemn the conditions found in Colorado which show the 
control of corporations over labor and politics, and we find there a 


system that has taken hold throughout the country. Here the serious 
problem is not the personality of any individual who may or may not 
be responsible, but the correction of a system which has grown up 
mainly under absentee ownership and which determines the acts of 
individuals according to their self-interest within the terms pre- 
scribed by the system. Immediate and public action is necessary to 
see that courts of justice are not prostituted to the service of one 
class against another, but the huge system of corporate control re- 
quires more far-reaching remedies before attainment. Absentee own- 
ership can not be brought to the sense of its responsibility without 
the enactment and adequate enforcement of workmen's compensa- 
tion for accidents and occupational diseases, sickness, invalidity, and 
old-age insurance. Meanwhile a partial method of meeting its re- 
sponsibility is a staff of safety, health, and labor commissioners, 
independent of the local executive staff, to report directly to the 
board of directors. The work of such a staff is directly in conflict 
with that of the executive staff, for the latter must get out "pro- 
duction ' 5 while the other must acquaint the directors and company 
with the oppression of labor which increased production and lowei 
costs often bring. The labor department can not be made subordi- 
nate to the executive department if the corporation really intends to 
safeguard its employees. 

We are not in favor of public ownership as solely a matter of 
improving labor conditions, and before such can be recommended 
there should be a more complete investigation and regulation and a 
clearing up of the values that will be paid and the administrative 
control that will follow. More immediate and necessary is a series 
of laws that will take the control of politics out of the hands of 
corporations and place it in the hands of the people. Several of 
our previous recommendations are intended to accomplish this pur- 
pose in so far as labor and capital are concerned, but we should add 
effective corrupt practices acts, designed to protect the secret ballot, 
to limit the amount of money and number of paid electioneered in 
elections, to prevent intimidation, and so on, as far as elections are 
menaced by political machines and wealth. Direct primaries for 
the nomination of candidates, protected by corrupt practices acts. 
Constitutional and legislative initiative for State and Federal Gov- 
ernments. The initiative would permit the people to change the 
Constitution at any point where the courts had depended upon it for 
a decision, and would make unnecessary any provision for recall of 
Supreme Court judges or of their decisions, or of taking from higher 
courts their power to declare laws unconstitutional. The recall of 
elected officials, including executives and judges of the lower courts, 
but not judges of the supreme courts or members of the legislature. 
Proportional representation, as adopted in Belgium, South Africa, 
Australia, and the Irish parliament, by which all parties or factions 
would be able to elect their own representatives in the legislatures 
or Congress in proportion to their numbers and without making 
deals with other parties. This would permit a labor party to have 
its representatives, as well as other minor parties, and would permit 
women, who we consider should have the suffrage, and other minor 
parties to elect their own representatives without making com- 
promises in order to get the votes of the major parties. These minor 


parties, containing as they do the advanced views on labor and social 
problems, are entitled to their proportionate share of influence in the 
legislatures or Congress. It can be seen that such a measure would 
take away from corporations much of their present inducement to 
control the great parties. It would furnish a legislature which 
would be a true reflection of the wishes of all the people. This 
recommendation applies to the legislature the principle of repre- 
sentation of interests, which we advance in the case of the advisory 
council to the Industrial Commission. 


. Commissioner Weinstock also presented the following dis- 
senting opinion : 

I dissent from the report prepared by Commissioner Commons on 
the question of immigration. That report says : 

We are convinced that very substantial restrictions on immigration, in addi- 
tion to the present restrictions, should be adopted. 

I am of the opinion that we have abundant immigration laws 
already on our statute books which, if enforced, will keep out of the 
country unfit immigrants. In normal times this country can profit- 
ably employ all the desirable and fit occidental immigrants that 
knock at our door, thereby adding greatly to the wealth and the 
strength of the Nation. 


1 See supplementary reports. 

3 See supplementary report. Appointed commissioner Mar. 17, 1915, to serve the unei- 
pired term of Hon. F. A. Delano, resigned. 



We concur in the report prepared by Commissioner Commons, 
dissenting, however, on the two following points, and supplementing 
it by certain other findings and recommendations following herewith. 

First. We dissent from the recommendation that the secondary 
boycott should be legalized. We regard the secondary boycott as 
unjust, inequitable, and vicious, in that it subjects third and inno- 
cent parties to injury and, at times, to great loss if not ruin. We 
are, therefore, as much opposed to it as we are to the blacklist. 
There have been instances where, for example, a strike would occur 
on a newspaper. The strikers would demand, for example, that a 
certain business house advertising in such paper should, despite the 
fact that it was under contract, withdraw its patronage, and on re- 
fusal of the advertiser to violate its contract with the newspaper, it 
became the victim of boycotts at the hands of the strikers more or 
less injurious, if not disastrous, in their results to such advertiser. 
The Supreme Court of the United States has, in our opinion, wisely 
and justly declared the secondary boycott illegal, and we regard it 
as an injury to society to legalize a system so vicious. 

It has been pointed out that 

* * * the boycott is the chief weapon of modern unionism, and also 
characteristic generally of its spirit and methods. A discussion of a boycott 
as a mere withdrawal of patronage is idle and academic. When that is the 
extent of the boycott in any particular case, the patronage is simply with- 
drawn, and nothing more is heard about it. From that simple procedure the 
modern boycott has been developed into a very different thing, and what has 
become known as the secondary boycott, dragging in third parties to the dis- 
pute and penalizing them for patronizing one of the parties to the dispute, has 
played an important part. 

Dealing with this phase of the question, Judge William H. Taft, 
in an early case (1893), said: 

The boycott is a combination of many to cause a loss to one person by 
coercing others against their will to withdraw from him beneficial business 
intercourse by threats that unless those others do so, the many will cause 
serious loss to them. 

In the case of Moore v. The Bricklayers' Union, Judge 'William 
H. Taft says : 

The conflict was brought about by the effort of defendants to use plaintiff's 
right of trade to injure Parker Bros., and, upon failure of this, to use plain- 
tiff's customers' rights of trade to injure the plaintiff. Such effort can not be 
in the bona fide exercise of trade, is without just cause, and is therefore ma- 
licious. The immediate motive of defendants here was to show to the build- 
ing world what punishment and disaster necessarily follows a defiance of their 
demands. The remote motive of wishing to better their condition by the power 
so acquired will not, as we think we have shown, make any legal justification 
for defendants' acts. We are of the opinion that even if acts of the character 
and with the intent shown in this case are not actionable when done by in- 
dividuals, they become so when they are the result of combination, because it 
is clear that the terrorizing of a community by threats of exclusive dealing in 
order to deprive one obnoxious member of means of sustenance, will become 
both dangerous and oppressive. 



The Anthracite Coal Strike Commission, in its report in touching 
upon secondary boycotts, says: 

It was attempted to define the boycott by calling the contest between em- 
ployers and employees a war between capital and labor, and pursuing the 
analogies of the word, to justify thereby the cruelty and illegality of conduct 
on the part of those conducting the strike. The analogy is not apt, and the 
argument founded upon it is fallacious. 

There is only one war-making power recognized by our institutions, and that 
is the Government of the United States and of the States in subordination 
thereto, when repelling invasion or domestic violence. War between citizens 
is not to be tolerated, and can not in the proper sense, exist. If attempted 
it is unlawful, and is to be put down by the sovereign power of the State and 
Nation. The practices which we are condemning would be outside the pale 
of civilized warfare. In civilized warfare, women and children, and the 
defenseless are safe from attack, and a code of honor controls the parties 
to such warfare, which cries out against the boycott we have in view. Cruel 
and cowardly are terms not too severe by which to characterize it. 

Second. We further dissent from said report in its limitation of 
public inquiry in labor disputes only to cases where both sides invite 
such inquiry. We believe that in the public interest there are times 
when compulsion in labor disputes is thoroughly justified. We feel, 
with organized labor, that there should be no restriction put upon 
the right to strike, realizing as we do, that the strike is the only 
weapon which, in the interest of labor, can be effectively and legally 
used to aid in bettering its conditions. We feel, also, that there 
should be no restriction placed upon the employer in his right to 
declare a lockout in order better to protect what he regards as his 
interest, and we therefore would not favor any plan that would inflict 
penalties upon the worker or upon the employer for declaring a 
strike or lockout. 

Where the two sides to a labor controversy are fairly well bal- 
anced in strength, the winning side must depend, in the last analysis 
upon the support of public opinion. Public opinion, therefore, be- 
comes a most important factor in the interest of industrial peace. 
Such public opinion, however, to be of value, must be enlightened. 
Under prevailing conditions this is almost impossible. All that the 
public is now able to get, as a rule, are garbled and ex parte state- 
ments, more or less misleading and unreliable, which simply tend to 
confuse the public mind. 

Where strikes and lockouts take place on a large scale, and more 
especially in connection with public utilities, the public inevitably 
becomes a third party to the issue, in that it has more at stake than 
both parties to the dispute combined. For example, if the street 
railways of a large city are tied up, the loss to the railway companies 
in the way of revenue, and to the workers in the way of wages, is 
great, but this loss becomes insignificant compared with the loss 
inflicted upon the rest of the community, to say nothing of the an- 
noyance, inconvenience, and menace to life and property, which not 
infrequently occur in such industrial disputes. The public, therefore, 
as the third party to the issue, is justified in demanding that an 
investigation take place, and that the facts be ascertained and pre- 
sented in an impartial spirit to the general public, so that ways and 
means may be found of adjudicating the dispute or of throwing the 
influence of a properly informed public opinion on the side which has 
the right in its favor. 


We, therefore, earnestly recommend that in the case of public 
utilities, the proposed industrial commission shall not only have 
power to mediate and conciliate, but also, at the request of either 
side to a dispute, or upon the initiative of the commission itself, 
should have the power, all voluntary methods having failed, to 
undertake a compulsory public inquiry when, in the discretion of 
the commission, public interest demands it; that it be given the 
fullest powers to summon witnesses, place them under oath, demand 
books and documents, all with a view of ascertaining the under- 
lying causes of the dispute and the issues involved, to the end of 
making recommendations that, in the judgment of the board of in- 
quiry, consisting of three members, one to be chosen by each side 
and the third to be chosen by these two, would be a fair and reason- 
able settlement of the points in dispute. It being understood, how- 
ever, that neither side is obliged to accept such recommendations, but 
may continue to strike or lockout, as the case may be. Meanwhile, 
however, the public will have ascertained in the most reliable way 
the issues involved, the facts as they have been found by the board 
of inquiry, and the basis upon which a fair settlement can be estab- 
lished, thus enabling the public more intelligently to throw its sup- 
port where it rightfully belongs. 

With the two foregoing modifications, we heartily concur in the 
report prepared by Commissioner Commons. We desire, however, 
additionally, to report as follows: 

We find that the alleged findings of fact and, in a general way, 
the comments thereon made in the report of the staff of this commis- 
sion, under the direction of Mr. Basil M. Manly, which has ^been 
made a part of the records of this commission, without the indorse- 
ment, however, of the commission, so manifestly partisan and unfair 
that we can not give them our indorsement. What we regard as the 
desirable recommendations in the report of Mr. Manly are dealt with 
to our satisfaction in the Commons report, which has our approval. 

We find that Mr. Manly's report places practically all the responsi- 
bility for the causes of industrial unrest at the doors of one side, 
forgetting that both sides to the issues are human, and, being human, 
are guilty of their fullest share of wrongdoing, and are alike respon- 
sible in greater or lesser degree, for the causes of industrial unrest. 

We are, therefore, prompted, in the interest of fairness and justice, 
to present herewith some of the additional causes of industrial 
unrest that, in the course of the investigations and public hearings 
of the commission, have forced themselves upon our attention. 

Despite the fact that we have been appointed to represent, on this 
commission, the employers of the Nation, we are free to admit that 
the investigations made by the commission, and the testimony 
brought forth at our public hearings, have made it plain that em- 
ployers, some of them, have been guilty of much wrongdoing, and 
have caused the workers to have their fullest share of grievances 
against many employers. There has been an abundance of testimony 
submitted to prove to our satisfaction that some employers have 
resorted to questionable methods to prevent their workers from or- 
ganizing in their own self-interest; that they have attempted to 
defeat democracy by more or less successfully controlling courts and 
legislatures; that some of them have exploited women and children 
and unorganized workers; that some have resorted to all sorts of 


methods to prevent the enactment of remedial industrial legislation ; 
that some have employed gunmen in strikes, who were disreputable 
characters, and who assaulted innocent people and committed other 
crimes most reprehensible in character; that some have paid lower 
wages than competitive conditions warranted, worked their people 
long hours and under insanitary and dangerous conditions; that 
some have exploited prison labor at the expense of free labor; that 
some have been contract breakers with labor ; that some have at times 
attempted, through the authorities, to suppress free speech and the 
right of peaceful ' assembly ; and that some have deliberately, for 
selfish ends, bribed representatives of labor. All these things, we 
find, tend to produce industrial unrest, with all its consequent and 
far-reaching ills. 

There is, therefore, no gainsaying the fact that labor has had 
many grievances, and that it is thoroughly justified in organizing 
and in spreading organization in order better to protect itself against 
exploitation and oppression. 

On the other hand, in justice to employers generally, it must be 
said that there has been much evidence to show that there is an 
awakening among the enlightened employers of the Nation, who have 
taken a deeper personal interest in the welfare of their workers than 
ever before in industrial history; that such enlightened employers 
are growing in number and are more and more realizing that, if for 
no other reason, it is in their own self-interest to seek the welfare 
of their workers and earnestly to strive to better their conditions. 
Employers, on their own initiative, have created sick funds and pen- 
sion funds ; have expended vast sums of money to insure greater 
safety to their workers; have, as compared with conditions of the 
past, greatly improved their methods of sanitation ; have done much 
to regularize employment; have increased wages; and in every way 
have endeavored to lighten the burdens of their workers. 

While there are many deplorable conditions yet remaining to be 
rectified, and while the condition of the worker is still far from ideal, 
we believe that, on the whole, the impartial investigator must find 
that, in normal times, on the average, the hours of the American 
worker are the shortest, his wages the highest, his working conditions 
the most favorable, his standard of living the highest, and his gen- 
eral well-being the best in the world's industrial history. 

Industrial Commissioner John B. Lennon, who is also a member 
of the executive council of the American Federation of Labor, in the 
absence of official figures has estimated that there are at this time 
about 20,000,000 wage earners in the United States, and that about 
3,250,000 of these are members of various labor unions. In other 
words, as a liberal approximation, about 16 per cent of the wage 
earners of America are members of trade unions. 

Considering that the American Federation of Labor came into 
life in 1881, some 34 years ago, and considering the earnest and 
zealous efforts that have been made by its representatives and the 
representatives of other labor organizations to agitate, educate, and 
organize, and considering still further the highly commendable ob- 
jects professed by organized labor, the membership results are dis- 
appointingly small. 

One reason given for the comparatively small percentage of union- 
ists in the ranks of labor is the hostility against unionism on the part 


of many employers. Organized labor points out that there are many 
employers' associations that are organized not to deal with, but to 
fight, unionism, and that this, in many instances, and more especially 
in the larger industrial enterprises, presents a very serious obstacle 
for organized labor to meet and to overcome. 

Representing as we do on this commission the employers' side, we 
are as one with the other members of our Federal commission who 
represent the general public, and also with those representing or- 
ganized labor, in believing that, under modern industrial conditions, 
collective bargaining, when fairly and properly conducted, is con- 
ducive to the best good of the employer, the worker, and society. 
We find that there are many enlightened employers who concur in 
this view, who in the past recognized and dealt with organized labor, 
but who now refuse to do so, and who, under proper conditions, 
would willingly continue to engage in collective bargaining. With 

food cause, in our opinion, however, they place the responsibility 
or their refusing to do so at the door of organized labor. There is 
an abundance of available testimony in our records to show that 
many employers are frightened off fiom recognizing or dealing with 
organized labor for fear that to do so means to put their heads in 
the noose and to invite the probability of seriously injuring, if not 
ruining, their business. 

The prime objection that such employers have to recognizing and 
dealing with organized labor is the fear of (a) sympathetic strikes, 
(&) jurisdictional disputes, (c) labor union politics, (d) contract 
breaking, (e) restriction of output, (/) prohibition of the use of non- 
union-made tools and. materials, (g) closed shop, (h) contests for 
supremacy between rival unions, (i) acts of violence against non- 
union workers and the properties of employers, (j) apprenticeship 

While we have found many sinners among the ranks of the em- 
ployers, the result of our investigation and inquiries forces upon us 
the fact that unionists also can not come into court with clean hands ; 
that this is not a case where the saints are all on one side and the 
sinners all on the other. We find saints and sinners, many of them, 
on both sides. 

The hope of future industrial peace must lie in both sides using 
their best endeavors to minimize the causes that lead to the growth 
of sins and sinners on each side of the question. 


Taking up seriatim the objections offered by many employers to 
recognizing and dealing with organized labor, we come first to that 
of the sympathetic strike. The employer contends, and we find our- 
selves in sympathy with his contention, that it is a rank injustice to 
subject him to a strike of his employees who have absolutely no 
grievances, to stop work because some other group of workers, 
possibly at a remote point, have a real or fancied grievance against 
their own employer, especially when such stoppage of work may 
not only inflict a very serious loss, but may mean ruin to the enter- 
prise of the innocent employer, thus making it, in violation of all the 


equities, a clear case of punishing the many innocent for the one or 
the few who may be guilty, who were party to the original dispute. 


The employer further points out that not only is his business liable 
to be ruined by the S3 7 mpathetic strike, but, more especially in the 
building trades, is he likely to become an innocent victim of jurisdic- 
tional disputes for which he is in no wise responsible and over which 
he has absolutely no control. 

Sidney and Beatrice Webb point out that 

It is no exaggeration to say that to the competition between overlapping 
unions is to be attributed about nine-tenths of the ineffectiveness of the trade- 
union world. 1 

Innumerable instances have occurred where jurisdictional strikes have lasted 
for months and sometimes for years. 2 

The elevator constructors had a serious and costly dispute with the machinists 
in Chicago over the installation of pumps connected with hydraulic elevators. 
A strike resulted for more than two years, during which most of the elevator 
men in the city were out of work while members of the machinists and other 
unions supplied their places with the Otis Elevator Co. 2 

In 1910 the secretary of the bricklayers said : 

Our disputes with the operative plasters' union during the past year have 
taken thousands of dollars out of our international treasury for the purpose of 
protecting our interest. The loss in wages to our members has amounted to at 
least $300,000. The loss to our employers has been up in the thousands, also. 2 

Prof. Commons, in his studies of the New York building trades, 
comments on the jurisdictional disputes as follows: 

Building construction was continuously interrupted, not on account of lock- 
outs, low wages, or even employment of nonunion men, but on account of 
fights between the unions. A friendly employer who hired only union men, along 
with the unfriendly employer, was used as a club to hit the opposing union, and 
the friendly employer suffered more than the other. 3 

The Chicago machinery movers caused considerable delay in the construction 
of the Harris Trust Building, and in a period of less than a year were re- 
sponsible for no less than 50 separate strikes, during which the work of the 
employers was delayed. 4 

Jurisdictional disputes waste both labor and capital. They make it imprac- 
ticable in many cases to use improved appliances and cheaper materials. They 
are responsible for hesitancy in undertaking and increasing expense in prose- 
cuting buildings, to the detriment of the building industry. 4 

Finally, where the disputes are long continued, they are responsible for that 
whole train of evil results which follows upon idleness and poverty. 6 

Sidney and Beatrice Webb agnin point out that in the industries of Tyne- 
side, within a space of 35 months, there were 35 weeks in which one or the 
other of the four most important sections of workmen in the staple industry of 
the district absolutely refused to w T ork. This meant compulsory idleness of 
tens of thousands of men, the selling out of households, and the semistarvation 
of whole families totally unconcerned with the disputes, while it left the unions 
in a state of weakness from which it will take years to recover. 6 

That wise and far-seeing labor leaders keenly appreciate the great 
wrongs inflicted not only upon the employers, but upon the workers 
themselves, by virtue of cessation of work in jurisdictional disputes, 
is emphasized by the following extracts from the report of Mr. 

1 Industrial Democracy, vol. 1, p. 121. 

2 The Bricklayer and Mason, February, 1911, p. 127. 

3 Trade-Unionism and Labor Problems. 

4 Interview, secretary of Building Employers' Association, Chicago, July, 1912. 

5 Industrial Democracy, vol. 1, p. 121. 
Ibid., vol. 2, p. 513. 


Samuel Gompers, president of the American Federation of Labor, at 
its convention in 1902: 

Beyond doubt, the greatest problem, the danger which above all others is 
threatening not only the success but the very existence of the American Federa- 
tion of Labor, is the question of jurisdiction. Unless our affiliated national 
and international unions radically and soon change their course, we shall, at no 
distant date, be in the midst of an internecine contest unparalleled in any era 
of the industrial world, aye, not even when workmen of different trades were 
arrayed against each other behind barricades over the question of trade against 
trade. They naturally regard each other with hatred, and treat each other as 
mortal enemies. 

There is scarcely an affiliated organization which is not engaged in a dispute 
with another organization (and in some cases, with several organizations) 
upon the question of jurisdiction. It is not an uncommon occurrence for an 
organization, and several have done so quite recently, to so change their laws 
and claims to jurisdiction as to cover trades never contemplated by the or- 
ganizers, officers, or members; never comprehended by their titles, trades of 
which there is already in existence a national union. And this without a word 
of advice, counsel, or warning. 

I submit that it is untenable and intolerable for an organization to attempt 
to ride roughshod over and trample under foot rights and jurisdiction of a 
trade, the jurisdiction of which is already covered by an existing organization. 
This contention for jurisdiction has grown into such proportions and is fought 
with such an intensity as to arouse many bitter feuds and trade wars. In 
many instances employers fairly inclined for organized labor are made inno- 
cently to suffer from causes entirely beyond their control. 

As proof of the prophetic and far-sighted utterances of President 
Gompers, it has been pointed out that " in 1911, in Chicago, his 
grim prophecy was actually fulfilled in the bitter jurisdictional wars 
fought by rival unions in that city in which paid thugs and gunmen 
turned the streets of Chicago into a condition of anarchy, and in 
which, as a mere incident from the union standpoint, millions of 
dollars of construction work remained idle, with a resultant loss to 
owners, contractors, and the business interest of the city beyond pos- 
sibility of calculation." 

We ask, what sane or thoughtful employer would willingly put his 
head in a noose such as this by recognizing and dealing with unions, 
and thus invite possible ruin ? 


The third objection of employers to recognizing and dealing with 
organized labor is the risk they run, especially in the building trades, 
where power to declare a strike is concentrated in the hands of a 
business agent, of finding themselves at the mercy of either a cor- 
rupt business agent or one who, for the sake of union politics, is 
endeavoring, in order to perpetuate himself in office, to make capital 
at the expense of the innocent employer by making unwarranted and 
unreasonable demands against the employer. 


The fourth reason offered by the employers for refusing to recog- 
nize or to deal with organized labor, is its increasing unreliability 
in keeping trade agreements. To give one case in point, our record 
gives the story in undisputed statement published in the United 
Mine Workers' Journal, which is the official organ of the United 
Mine Workers of America, written by Mr. W. O. Smith, ex-chair- 
man of the executive committee of the Kentucky District of United 


Mine Workers of America, in which Mr. Smith, among other things, 
says : 

Because of the indifference of the conservative members of our unions, and 
the activity of the radical element which is responsible for the greatest menace 
which has ever threatened the United Mine Workers of America, the local 
strike, during the past two or three years the international, as well as the 
district and subdistrict officials, have been confronted with many perplexing 
problems, some of which seem to threaten the very life of the organization. 
But I believe I am safe in saying that no problem has given them so much 
concern as the problem of local strikes in violation of agreements. 

Thousands of dollars are expended every year in an effort to organize the 
250,000 nonunion miners in the United States, while hundreds of our members 
go on strike almost every day in absolute, unexcusable violation of existing 
agreements. 1 

This criticism comes not from an e'mployer, but from an ardent, 
earnest unionist, in high standing in his organization. 

Corroborating the statement of Mr. Smith, comes a statement pub- 
lished in Coal Age of December 20, 1913, issued by the Association 
of Bituminous Coal Operators of Central Pennsylvania, addressed to 
Mr. Patrick Gilday, president of District No. 2, U. M. W. of A., 
Morrisville mines, Pennsylvania, dated Philadelphia, December 12^ 
1913, in w.hich, among other things, the following appears : 

Whereas, Rules 12 and 13 of said agreement provide, " that should differences 
arise between the operators and mine workers as to the meaning of the pro- 
visions of this agreement or about matters not specifically mentioned in this 
agreement, there shall be no suspension of work on account of such difference, 
but an earnest effort be made to settle such differences immediately." Whereas, 
notwithstanding the fact that Rule 15 provides the right to hire and discharge, 
the management of the mine and the direction of the working forces are vested 
exclusively in the operator, the United Mine Workers of America have abso- 
lutely disregarded this rule, in that they have at numerous times served notices 
on substantially every operator belonging to our association, that unless all the 
employees working for such operators should become members of the union on 
or before certain dates mentioned in said notices, that they, the Mine Workers, 
would close or shut down the operators' respective mines, and in many instances 
did close the mines for this reason, and refused to return to work unless such 
nonunion employees were discharged. This conduct is in direct violation of 
the contract, and specifically interferes w r ith and abridges the right of the oper- 
ator to hire and discharge ; of the management of the mine, and of the direction 
of the working forces; this conduct in -violation of contract on the part of the 
Mine Workers, as well as that mentioned in the preceding paragraph, has 
resulted in more than one hundred strikes during the life of our scale agree- 
ment. 2 

Numerous other illustrations could be given from the records of 
the commission, showing that there are other instances where unions 
did not observe their contracts, tending to make, in the minds of 
many employers, a character for all unionism, and thus increasing 
their hesitancy in recognizing and dealing with unions. 


Not least among the reasons given by fair-minded employers for 
refusing to recognize or deal with labor unions, is the fact that many 
unions stand for a limited output, thus making among their workers 
for the dead level, and thereby malting it impossible for the union 
employer successfully to compete with the nonunion employer, who 
is not faced with such handicap. 

1 New York hearings, IT. S. Commission on Industrial Relations, pp. 2750-2751. 

2 Now York hearings, U. S. Commission on Industrial Relations, pp. 2061-20G2. 


British industrial conditions are cursed with the practice of limited 
output, as compared with the absence of this practice in industrial 
Germany. As a consequence, Germany, in time of peace, has indus- 
trially outrun Great Britain by leaps and bounds. 

The British unionist, by practicing limited output, has thus played 
directly into the hands of his keenest industrial competitor, the 

The records of the commission also show that organized labor, 
almost as a unit, is very strongly opposed to the introduction in in- 
dustry of what has become known as scientific management, or 
efficiency methods. In relation to this phase of the problem, we find 
ourselves as one with the statement made and the opinions expressed 
by Mr. Louis D. Brandeis before the commission at Washington, in 
April, 1914, who, when invited to express his opinion on the question 
of efficiency standards, scientific management, and labor, among other 
things, said: 

My special interest in this subject arises from the conviction that, in the 
first place, workingmen, and in the second place, members of the community 
generally, can attain the ideals of our American democracy only through an 
immediate increase and perhaps a constant increase, in the productivity of 
man. * * * Our ideals could not be attained unless we succeed in greatly 
increasing the productivity of man. * * * The progress that we have 
made in improving the conditions of the workingman during the last century, 
and particularly during the last 50 years, has been largely due to the fact that 
intervention or the introduction of machinery has gone so far in increasing the 
productivity of the individual man. With the advent of the new science of 
management has come the next great opportunity of increasing labor's share 
in the production, and it seems to me, therefore, of the utmost importance, not 
only that the science should be developed and should be applied as far as 
possible, but that it should be applied in cooperation with the representatives of 
organized labor, in order that labor may now, in this new movement, get its 
proper share. 

I take it that the whole of this science of management is nothing more than 
an organized effort, pursued intensively, to eliminate waste. * * * It is in 
the process of eliminating waste and increasing the productivity of man, to 
adopt those methods which will insure the social and industrial essentials, 
fairness in development, fairness in the distribution of the profits, and the 
encouragement to the workingman which can not come without fairness. 

I take it that in order to accomplish this result, it is absolutely essential that 
the unions should be represented in the process. * * * When labor is given 
such a representation, I am unable to find anything in scientific management 
which is not strictly in accord with the interests of labor, because it is nothing 
more than fair, through the application of these methods which have been 
pursued in other branches of science, to find out the best and the most effective 
way of accomplishing the result. It is not making men work harder the very 
effort of it is to make them work less hard, to accomplish more by what they 
do, and to eliminate all unnecessary motion, to give special effort and special 
assistance to those who, at the time of the commencement of their work, are 
mostly in need of the assistance because they are less competent. 

As I view the problem, it is only one of making the employer 
recognize the necessity of the participation of representatives of labor in the 
introduction and carrying forward of the work, and on the other hand, bring- 
ing to the workingman and the representatives of organized labor, the recog- 
nition of the fact that there is nothing in scientific management itself which is 
inimical to the interests of the workingman, but merely perhaps the practices 
of certain individuals, of certain employers or concerns who have engaged 
in it. 

I feel that this presents a very good opportunity for organized labor. It 
seems to me absolutely clear, as scientific management rests upon the funda- 
mental principles of advance in man's productivity, of determining what the 
best way was of doing a thing, instead of the poor way, of a complete coordi- 
nation and organization of the various departments of business, that the intro- 
duction of scientific management in our businesses was certain to come; that 


those who oppose the introduction altogether are undertaking a perfectly im- 
possible task ; and that if organized labor took the position of absolute opposi- 
tion, instead of taking the position of insisting upon their proper part in the 
introduction of this system, and the conduct of the business under it, organized 
labor would lose its greatest opportunity, and would be defeating the very pur- 
pose for which it exists. 

On being asked the question what, in his opinion, would be the 
status of unionism in the event of scientific management becoming 
a common industrial condition, Mr. Brandeis said: 

I think there would be a great deal left for unionism to do, and do not think 
the time will come when there will not be, as long as there is a wage system 
in existence. * * * I do not feel that we have reached the limit of the 
shorter day, certainly not in some employments, nor do I think we have 
reached the limit of the higher wage ; certainly we have not reached the limit 
of the best conditions of employment in many industries. 

All of these subjects are subjects which must be taken up, and should be 
taken up by the representatives of the men and women who are particularly 
interested. There will be work for unions to do as long as there is a wage 

Mr. Brandeis further stated that he saw no menace to unionism in 
scientific management, and that he favored labor having a voice in 
determining all the factors involved in scientific management. 

In answer to the question if he thought the fears groundless on the 
part of organized labor in looking upon scientific management as a 
menace to unionism, he answered, saying: 

Yes ; groundless except for this I think, for instance, that the existence of 
the system of scientific management, unless the unions choose to cooperate 
with the effort to install it, may menace unionism, because the most efficient 
and advanced employers may adopt it, whether the unions like it or not, and in 
that way these establishments may become successful, and be so buttressed 
by their success as to be able to exclude unions from their business. That is 
the menace, if they do not take part, but if they cooperate it seems to me it 
simply advances unionism. 

Mr. Brandeis confirmed the thought that if unionism is wise it 
will make the most of its opportunity by enlisting its cooperation in 
the movement, and will endeavor to bring scientific management to 
its highest possibility at the earliest day, in order that it may better 
share the increased surplus created by such scientific management, 
and that for unions to work against it is in the nature of a colossal 
error. The testimony of Miss Ida 'Tarbell on this point was in full 
accord with that of Mr. Brandeis. 


The sixth reason offered by employers for refusing to recognize or 
to deal with organized labor is that when they do so they are often 
not permitted to use nonunion-made tools or materials, thus placing 
upon themselves a burden and a hardship from which nonunion em- 
ployers are free, and thus also laying themselves liable to get into all 
sorts of controversies with the union, which are vexatious, annoying, 
time-losing, and, frequently, most costly, as they sometimes lead to 
grave and serious strikes. 


The seventh reason why many employers refuse to recognize or to 
deal with organized labor (and among these may be mentioned the 
employers of large bodies of workers who have previously had trade 
agreements with organized labor) is the matter* of the closed shop. 


Many such employers are quite willing to recognize and to deal 
with unions upon a tacit or written open-shop agreement, but they 
have no confidence, based on their previous experience, that an open- 
shop agreement will be respected by the unions. Such employers 
labor under the fear that, despite an open-shop agreement or under- 
standing, the union, at its first opportunity, will force them to com- 
pel the nonunion worker to join the union. Employers such as these 
are unwilling to place themselves in the position where the union 
can control them despite an open-shop agreement or understanding 
and, so to speak, put a pistol to their heads and command them 
in turn to command a nonunion worker on pain of dismissal to join 
the union. Such employers feel that, having an open-shop agree- 
ment or understanding, if for any reason a worker does not choose 
to join the union, they as employers should no more compel him to 
do so than they would compel him to join any particular fraternal 
society or religious body. They feel that if they are working under 
an open-shop agreement or understanding and such nonunion worker 
is capable, efficient, and has rendered long and faithful service, that 
they are doing him and themselves a great injustice either to force 
him into a union or to discharge him because he will not join a union. 

Where an employer enters into an agreement with a union which 
does not stipulate that only union men shall be employed but leaves 
the employer free to employ exclusively union men or some union and 
some nonunion men as he may prefer, so long as he maintains for all 
men union conditions, that in such an event the union has no right to 
demand that the nonunionist should be compelled by the employer to 
join the union or a strike will follow. For the union, under such con- 
ditions, to strike, as it has done, notably in the Pennsylvania coal 
fields, and as pointed out also by W. O. Smith, ex-chairman of the 
executive committee of the Kentucky district of the United Mine 
Workers of America, whose statements have been quoted herein, is 
a violation, on the part of the union, of its contract. 

It may be held that unionists working under an open-shop agree- 
ment or understanding always reserve to themselves the right, for 
any reason or for no reason, to cease to work alongside of nonunion 
men, and that they further reserve the right to determine the psycho- 
logical moment at which it is in their interest to cease work or to go 
on a strike because they will not work alongside of nonunion men. 
It is the fear of the likelihood of their doing this that frightens 
off many employers from recognizing or dealing with organized 
labor. They feel that even when they are operating under an open- 
shop agreement or understanding which does not deny them the 
right to employ nonunion men so long as they work under union 
conditions, they are working with a sword suspended over their 
heads by a slender thread, which may break at any moment, and are 
liable to have a strike on their hands at the most critical time, which 
may spell ruin for their business. Employers, as a rule, do not deem 
it a good business policy to invite such risks. 

An impressive example of this policy on the part of organized labor 
was brought out in the testimony taken by the commission at Lead, 
S. Dak. Supt. Grier, of the Homestake IVIining Co., Lead, S. Dak., 
at the hearing held by the commission at that point in August, 1914, 
stated that he had recognized and dealt with the Lead City Miners' 
38819 16 16 


Union from 1877 to 1909, with the understanding that they were at 
liberty to employ union or nonunion men as they preferred. Late in 
October, 1909, a resolution was published in the daily papers that 
on and after the 25th of November, 1909, members of the federation 
would not work with those working for the Homestake Mining Co. 
who failed and neglected to become members of the union in good 
standing; and in consequence, on the 25th of November, the mine 
was closed down, and from that day on the company has not recog- 
nized nor dealt with organized labor. 

We are, however, of the opinion that where an employer enters 
into an agreement with a union which stipulates that only union 
men shall be employed, a thing which he has both a moral and a legal 
right to do, the nonunion worker, in that event, can have no more 
reason to find fault with the employer in declining fo employ him 
than a certain manufacturer would have if the employer, for rea- 
sons satisfactory to himself, should confine his purchases to the 
product of some other manufacturer. 


Testimony has been given before this commission indicating, in 
more than one instance, that contests between rival unions, or fac- 
tions of the same union, have led to strikes causing industrial unrest 
from which the worker as well as the employer, has suffered harm 
and loss. 



The ninth objection raised on the part of the employers against 
unionism, which has been substantiated abundantly by investigation 
and by testimony taken by the commission, is the resort on the part 
of unionists to violence in labor troubles, and to the fact that union- 
ists condone such violence when committed in the alleged interest 
of labor. 

The most notable case, of course, in modern industrial history, is 
that of the structual iron workers, which resulted in the plea of 
guilty on the part of the McNamara brothers, for the blowing up of 
the Los Angeles Times Building, killing over 20 innocent people, and 
which further resulted in Frank Ryan, the president of the Struc- 
tural Iron Workers' National Union, and a group of other labor 
union officials, being convicted and sentenced to prison. 

As a matter of fact, the bringing into life of this United States 
Commission on Industrial Relations was due primarily to the long 
series of crimes committed at the instance of the structural iron 
workers' union, w r hich culminated in the blowing up of the Los 
Angeles Times Building, with its attendant loss of life of innocent 
citizens, and which aroused a state of public sentiment demanding 
that an investigation be made by an impartial Federal body, to 
inquire into the underlying causes of industrial unrest, the existence 
of which seemed to be evidenced by the violent activities on the part 
of labor in various parts of the country. 

Vincent St. John, secretary of the Industrial Workers of the 
World, in his testimony before the Commission on Industrial Rela- 


tions at a public hearing in New York, said that he believed in 
violence when it was necessary to win. He said that if the destruc- 
tion of property seemed necessary to bring results, then he believed 
in the destruction of property. 

A. Johannsen, of California, State organizer for the building 
trades of California, and general organizer for the United Brother- 
hood of Carpenters, in his testimony before the United States Com- 
mission on Industrial Relations at Washington in May, 1915, in 
speaking of the reelection of Frank Ryan, president of the National 
Structural Iron Workers' Union, among other things thanked the 
Lord that the union had the courage to reelect him president after 
he had been convicted as a participant in the dynamiting crimes of 
the structural iron workers. He further expressed the hope that it 
was true that the convicted dynamiters, after being reelected to office 
by the iron workers, were met by a procession or applause at Fort 
Leavenworth while on their way to prison, and that President Ryan 
performed his official duties while there, and rendered his official 
reports as president of a union of 10,000 members and a part of the 
American Federation of Labor. 

In contradistinction to the opinion of Mr. Johannsen, to the effect 
that he thanked the Lord that the union had the courage to reelect 
Frank Ryan president after he had been convicted as a participant 
in the dynamiting crimes of the structural iron workers, we have the 
opinion of Dr. Charles W. Eliot, president emeritus of Harvard 
University, who, in his testimony before the United States Commis- 
sion on Industrial Relations at New York, January 29, 1915, in 
referring to this very instance, said, in answer to the question as to 
how he regarded the action of the structural iron workers' union in 
reelecting Frank R} T an president after his conviction of crime, "As 
a serious moral offense against the community as a whole." 1 

Speaking about respecting court labor injunctions, Witness Jo- 
hannsen said: 

I don't think the power of an injunction goes much beyond the courage of 
those who are enjoined. I think that if a person is convinced in his own mind 
and his own feelings that his case is just, that his demands for an increase of 
wages, or whatever the fight may he if you think and feel you are right, why, 
then go ahead. Never mind about those pieces of paper. 2 

On being asked whether he (Johannsen) believed that Frank 
Ryan, president of the Structural Iron Workers' National Union, 
and his associates, were innocent men railroaded to prison, he said 
that he did, and that he w T as satisfied they never committed any 
crime against labor or a better society, and were therefore unjustly 
convicted. This was his attitude, despite his attention having been 
called to the opinion and decision rendered by the circuit court of 
appeals, including Judges Baker, Seaman, and Kohlsaat, against 
whose integrity and fairness no whisper had ever been heard, and 
who seemingly went into the evidence in the dynamiting cases most 
exhaustively and carefully, and who, among other things, in their 
decision, said 

The facts thus recited, as proven by the Government on the trial, may be 
mentioned in part as follows : Almost 100 explosions thus occurred, damaging 
and destroying buildings and bridges in process of erection where the work 

1 Now York hearings, TT. S. Commission on Industrial Relations, p. 1007. 

2 Washington hearings, May, 1915, U. S. Commission on Industrial Relations, p. 958. 


was being done by open-shop concerns, and no explosions took place in connec- 
tion with work of a similar character, where the work was done by closed- 
shop concerns. * * * In connection with this work of destruction, dyna- 
mite and nitroglycerine was purchased and stolen, and various storage places 
arranged to conveniently store such explosives which were to be used in the 
destruction of property in the various States referred to. * * * Large 
quantities of dynamite and nitroglycerine were at various times stored in the 
vaults of the association at Indianapolis, and also in the basement of the build- 
ing. * * * Four explosions occurred in one night at the same hour in 
Indianapolis, and explosions were planned to take place on the same night, 
two hours apart, at Omaha, Nebr., and Columbus, Ind., and the explosions 
so planned did occur on the same night, at about the same time, instead of two 
hours apart, owing to the fact that one clock was defective. * * * All the 
dynamite and nitroglycerine * * * including the expenses incident to 
the stealing of the dynamite, were paid out of the funds of the international 
association, and these funds \vere drawn from the association upon checks 
signed by the secretary-treasurer, John J. McNamara, and the president, 
Frank M. Ryan, plaintiff in error. 

The written correspondence on the part of many of the plaintiffs in error 

* * * furnish manifold evidence not only of understanding between the 
correspondents of the purposes of the primary conspiracy, but many thereof 
convey information or direction for the use of the explosives, while others 
advise of the destruction which has occurred, and each points unerringly not 
only to the understanding that the agency therein was that of the conspirators, 
but as w r ell to the necessary steps in its performance of transporting the 
explosives held for such use. This line of evidence clearly tends to prove, 
and may well be deemed convincing of the fact on the part of many, if not all, 
of the correspondents. 

Plaintiff Frank M. Ryan was president of the association and of its execu- 
tive board, and was active manager and leader of the contest, and policies 
carried on throughout the years of the strike and destructive explosions in 
evidence. Letters written and received by him at various stages of the contest 
clearly tend to prove his familiarity with and management of the long course 
of destroying open-shop structures, however guarded in expression. He was 
at the headquarters of the association for the supervision of operations periodi- 
cally, usually two or three days each month, uniformly attended the meetings 
there of the executive board, and made frequent visits to the field of activities. 

* * * He signed all of the checks in evidence for payments for expenditures 
for purchase, storage, and conveyance of explosives. * * * Many other 
letters in evidence, both from and to him, however disguised in terms, may well 
authorize an inference of his complete understanding of, and complicity for, 
the explosions, both in plans and execution. 1 

Masses of testimony were filed with the commission to prove that 
organized labor at times resorted to a policy of lawlessness. Among 
other documents may be cited a magazine under the title of A 
Policy of Lawlessness, a partial record of riot, assault, murder, and 
intimidation, occurring in strikes of the iron molders' union, during 
1904, 1905, 1906, 1907, published by the National Founders' Asso- 
ciation, in which are given, as a partial list taken from court records, 
a great number of instances of violence on the part of labor unionists 
in labor disputes; and also a document published as a report, sub- 
mitted by the committee on labor disputes of the Cleveland Chamber 
of Commerce, entitled " Violence in Labor Disputes, " giving hun- 
dreds of instances where unionists had resorted to violence in labor 
troubles in that community alone. 

Mr. Luke Grant, special investigator for the United States Com- 
mission on Industrial Relations, in his report to the commission on 

1 Washington hearings, May, 1915, TJ. S. Commission on Industrial Relations, pp. 1004- 


the National Erectors' Association and the International Association 
of Bridge and Structural Iron Workers, says : 

Do they [the unions] believe in violence? They did not destroy property 
and they don't know who did. They probably adopted resolutions denouncing 
the unknown perpetrators, and offering a reward for their arrest and con- 
viction. The Western Federation of Miners, in convention, offered a reward 
for the arrest of the men who blew up the Independence depot in June, 1904, 
killing 14 men. Harry Orchard afterwards confessed that he and Steve Adams 
did it, acting as agents for the officers of the union. 

In this way do union men collectively approve of violence, that few if any 
of them would individually permit (p. 148). 

Referring to the industrial war between the National Erectors' 
Association and the structural iron workers' union, Mr. Grant con- 
tinues to say: 

When the hopelessness of the situation became apparent to the union officials, 
resort was made to the destruction of property. Diplomacy was out of the 
question, so dynamite was tried (p. 150). 

The report of Luke Grant brings out the fact that the structural 
iron workers had no grievances against their employers in the matter 
of wages, hours, or working conditions. The only question at issue 
was that of the closed shop. To enforce the closed shop, the struc- 
tural iron workers seemed to feel themselves justified in dynamiting 
over 100 properties and destroying many innocent lives. 

Police Commissioner Arthur Woods, of the city of New York, in 
his testimony before the United States Commission on Industrial 
Relations in May, 1915, at Washington, D. C., speaking of violence 
by labor unions, among other things, said : 

The result of our investigation shows a course of procedure like this : There 
would be a strike and the strikers would retain some gunmen to do whatever 
forcible or violent work they needed. The employer, to meet this violence, 
would in a comparatively small percentage of cases, and not as many cases as 
the gunmen were employed on the other side, hire a private detective agency. 
The function that the gunmen were to perform was to intimidate the workers 
that were hired to take the place of the strikers. * * * There were three 
indictments for murder in the first degree. 

The question was asked Police Commissioner Woods in how far 
his investigations had warranted the statement that appeared in the 
New York Herald of May 14, 1915, reading as follows : 

Several of the indictments mentioned assault upon members of the union, 
and in this connection District Attorney Perkins said last night that the reign of 
lawlessness was caused by union leaders who wished to perpetuate themselves 
in power, who hired assailants to assault contenders in their own unions for 
their places, and who used their union offices to extort blackmail under threats 
from employers. Seven men are indicted for assault in a riot for control of 
the union. Four men are indicted for hiring Dopey Benny's men to go to a 
nonunion factory and rough-house the employees as they left, and wreck the 
plant. A dozen workers were wounded in that fight. 

Six union men are accused of extortion and assault in using violence to 
collect a fine of $100 upon an employer. Four others are accused of hiring the 
Dopey Benny band to shoot up a nonunion factory. Many shops were fired. 
The factory suffered a damage of $1,000 and several persons were injured. 
Other indictments mentioned cases where the band was employed by union 
leaders to attack nonunion workers, to wreck factories, and even to assault 
nonunion men who opposed the leaders (pp. 964-5). 

To all of the foregoing, Police Commissioner Woods replied, 
" That is the general line of things that we found." 


One of the ablest and clearest-headed exponents of the cause of 
labor that testified before this commission was Morris Hillquit, of 
New York. In speaking of violence in labor troubles, he is quoted 
as saying, 1 that the resort to violence and lawbreaking was " ethically 
unjustifiable and tactically suicidal." Mr. Hillquit pointed out that 
wherever any group or section of the labor movement " has embarked 
upon a policy of ' breaking the law ' or using ' any weapon which will 
win a fight,' whether such policy was styled ' terrorism,' f propaganda' 
<of the deed, ' direct action,' ' sabotage,' or ' anarchism,' it has in- 
variably served to destroy the movement by attracting to it profes- 
sional criminals, infesting it with spies, leading the workers to need- 
less and senseless slaughter, and ultimately engendering a spirit of 
disgust and reaction." 

Robert Hunter, commenting on the foregoing statement made by 
Morris Hillquit, says (p. viii) : 

It will, I think, be clear to the reader that the history of the labor movement 
during the last half century fully sustains Mr. Hillquit's position. 


The question of apprenticeships has led to much industrial strife 
and consequent industrial unrest, where unions have arbitrarily de- 
termined the number of apprentices that the employer may take on. 
' Where this practice has prevailed the union employer has, in com- 
petition with the nonunion employer, been seriously handicapped, 
The remedy for this evil lies obviously in a joint agreement under the 
direction of the proposed State industrial commissions, in which each 
side has an equal voice in determining the proper quota of appren- 
tices to be employed. 

In conclusion, it is our desire to point out that organized labor is 
chargeable with its fullest share of creating causes of industrial un- 
rest, because of its sympathetic strikes, its jurisdictional disputes, its 
labor union politics, its contract breaking, its resort to violence in 
time of trouble, its policy of limited output, and its closed shop 
policy. There is an abundance of evidence in the records of the com- 
mission to show that organized labor is also guilty of intimidating 
courts, more especially the lower criminal courts, to deal lightly with 
labor offenders charged with criminal assaults in labor troubles ; and 
that some judges, more especially in the lower courts, toady to 
organized labor for vote-getting purposes, and dismiss union labor 
men guilty of lawbreaking, or impose on them nominal penalties out 
of all proportion to the crimes committed. 

These various policies have brought about their fullest share among 
the workers, to say nothing of the injury inflicted 011 employers and 
on society, of poverty, suffering, wretchedness, misery, discontent, 
and crime. Organized labor will never come into its own, and will 
indefinitely postpone the day when its many commendable objects will 
oe achieved in the broadest sense, until it will cut out of its program 
sympathetic strikes, until it can prevent cessation of work in juris- 
dictional disputes, until it can more successfully prevent labor union 
politics, until it can teach many in its rank and file to regard more 
sacredly their trade agreements, until it can penalize its members for 

1 Robert Hunter, Violence and the Labor Movement, p. viii. 


resorting to violence in labor disputes, and until it can make it a labor 
union offense to limit output. 

Organized labor may ask, "If we cut out the evil policies com- 
plained of from our program, what offensive and defensive weapons 
will be left us with which to protect ourselves against the unfair 

The answer is that when labor is effectively organized it has two 
most powerful weapons at its command that the employer, as a rule, 
dreads and fears because of the great damage these weapons can 
inflict on him, namely, the strike and the primary boycott, both of 
which are within the moral and legal rights of the worker to use. 

Generally speaking, the evils complained of have been eliminated 
from the program of the railway brotherhoods. As a consequence, 
railway managers do not hesitate to recognize and to deal with the 
railway unions, to their mutual advantage and satisfaction, with the 
result that collective bargaining has become the common condition 
in the railway w r orld. Railway strikes and lockouts have now be- 
come most infrequent, and industrial unrest due to these causes in 
this sphere of activity has become greatly minimized. 

If these evils are eliminated by organized labor from its program, 
much will have been done to stimulate collective bargaining and to 
minimize the existing causes of industrial unrest. The remedies 
for all these evils do not lie with the employer; they rest wholly and 
solely with unionists. The responsibility for the grow r th of these 
evils, in our opinion, rests primarily with unionists who neglect their 
union duties and who are as unmindful of their duties as union men 
as are many voters of their civic duty who remain at home on elec- 
tion dsij. 

We have faith in the honesty of purpose, in the fairness of spirit, 
and in the law-abiding character of the American worker, and we 
do not believe that the rank and file of American wage earners are 
in favor of many of the practices of some unions which have sub- 
jected unionism to so much severe, but just, criticism. We believe 
it is the duty of each unionist regularly to attend the meetings of his 
union in order that democracy shall prevail in trade-unions instead 
of an autocracy or despotism, which inevitably follows where the 
best membership fails to attend union meetings and thus permits the 
affairs of the organization to get into the hands of incompetent, ill- 
judging, or dishonest officials, who, for their selfish ends, abuse the 
power and authority vested in them. 

Wherever there are found honest, high-minded, clear-headed labor 
leaders and in the course of our investigations and hearings we 
have come into close personal touch with many such as these, who 
have commanded our esteem and respect it will be found that, as 
a rule, they represent unions where the better membership takes a 
lively and active interest in the welfare of the association, and re- 
gards it as a sacred duty to regularly attend its meetings. 

We say frankly that if w r e were wage earners we would be union- 
ists, and as unionists we should feel the keen responsibility of giv- 
ing the same attention to our trade-union duties as to our civic 

The ideal day in the industrial world will be reached when all 
labor disputes will be settled as a result of reason and not as a result 
of force. This ideal day can be hastened if the employers, on the 


one hand, will earnestly strive to place themselves in the position of 
the worker and look at the conditions not only through the eye of 
the employer but through the eye of the worker; and if the worker 
will strive to place himself in the position of the employer, and look 
at the conditions not only through the eye of the worker but through 
the eye of the employer. 

This, of course, means the strongest kind of organization on both 
sides. It means that employers must drive out of the ranks of their 
associations the law breaker, the labor-contract breaker, and the ex- 
ploiter of labor. It also means that, in the interests of fairness, 
every board of directors of an industrial enterprise should have 
within its organization a committee for the special purpose of keep- 
ing the board of directors advised as to the condition of their work- 
ers. And it finally means that trade-unions must, in order to mini- 
mize the causes of industrial unrest, among other things remove the 
weak spots in unionism set forth herein, thereby hastening the day 
when employers will no longer fear to recognize and deal with 
unions, and when collective bargaining shall thus become the com- 
mon condition . 

Finally, we feel that employers, individually and through their 
associations, in common with thoughtful representatives of labor, 
should give their fullest share of thought and lend their heartiest co- 
operation in aiding to solve, through constructive legislation and 
other ways, the great problems of vocational education, continuation 
schools, woman and child labor, apprenticeship, hours of labor, hous- 
ing, sickness insurance, workmen's compensation, safety measures, 
old-age pensions, and unemployment. The hope is therefore ex- 
pressed that employers will strive to work with rather than against 
intelligent labor representatives in aiding, through these various 
movements, to lessen industrial unrest and to still further improve 
the condition of wage earners and their dependents. 


1 Appointed commissioner Mar. 17, 1915, to serve unexpired term of Hon. F. A. Delano, 



The law creating the United States Commission on Industrial Re- 
lations, in additon to other things, says : " The commission shall seek 
to discover the underlying causes of dissatisfaction in the industrial 
situation and report its conclusions thereon." 

The causes of industrial unrest may be put under five main groups : 

First. Low wages. 

Second. Unemployment, through seasonal occupations, periods of 
depression, accidents, and sickness. 

Third. The development of large industries. 

Fourth. Long working hours and insanitary conditions. 

Fifth. Unsatisfactory rural conditions. 

I will analyze each of these groups separately. 

First. Low wages, with all the attendant evils, I consider the prime 
cause for industrial unrest. 

One of the chief factors in wage depression is undoubtedly the 
encouraged, stimulated, and probably assisted immigration which has 
brought to our shores millions of unskilled workers in the last few 
years. These immigrants, coming from those countries where vastly 
lower wage rates prevail, develop in America a wage competition of 
whch the employer naturally takes advantage. 

The European war will probably relieve this immigration situation 
for the next few years, but it is a question to which our Government 
must give serious consideration in the near future. 

Inefficency of the unskilled worker is also a contributory cause of 
low wages. The average applicant for work is irresponsible and 

With all our vaunted free-school system, our industrial education. 
is deplorable. In our large cities they are beginning to consider the 
question seriously, but our rural schools are lamentably deficient. 
This inefficiency, which tends to lower the whole standard, can be 
corrected only through improved educational facilities. 

Government assistance should be given to aid in the establishment 
of vocational, trade, and continuation schools as a part of our 
public-school system. 

The gravitation of industries into large units has caused the 
skilled worker to be supplanted by the unskilled, who becomes merely 
a cog in the wheel of the great machine, performing the monotonous 
duties that anyone could easily do after a few weeks' practice. 

The wages of the unskilled laborer are so pitifully small that it is 
almost impossible for him to maintain a family, even with the most 
rigid economy. 

I suggest as the only remedy for low wages, due to these conditions, 
the enactment of a national minimum wage law. 



Second. Under the second cause of industrial unrest unemploy- 
ment we have seasonal occupations, as, for example, ice cutting and 
logging in winter, harvesting and fruit-picking in summer. 

This problem will always be with us, and should be dealt with 
through an efficient system of national employment agencies, to be 
administered by the Federal Government. 

Private employment agencies have proved inadequate; have even 
in many cases been used to exploit the worker. I therefore strongly 
recommend that all employment agencies be managed by the Gov- 

We have also unemployment due to periods of depression. The 
Federal employment agencies would take care of these cases, bring- 
ing, when possible, the man and the job together, but in periods of 
long depression, when no work is to be found, Government, State, 
and municipal work, which had been held in reserve for this pur- 
pose, should then be provided. 

Should all these resources be exhausted and there still remain un- 
employed workers, there should be Government concentration camps 
where work with a small wage would be provided, supplemented by 
agricultural and industrial training. 

The fear of unemployment because of accident or illness fosters a 
feeling of discontent which tends to cause industrial unrest. 

Workmen's compensation laws and sickness insurance, with proper 
restrictions, would be the proper correctives here. 

Workmen's compensation laws thus far developed protect the man 
only when accident occurs during working hours, and this is paid for 
entirely by the employer. If an accident occurs causing injury to a 
man just before entering his work place, the consequent loss to his 
family is just as great as though he had been hurt five minutes later 
within the factory walls, and yet he receives nothing. 

I therefore recommend that the workmen's compensation law 
should provide insurance against accident wherever and whenever 
caused. This insurance, however, should be paid by the man him- 
self, his employer, and the Government jointly. The same idea 
should apply also to sickness insurance. 

The worker himself should feel these responsibilities and should 
always share the expense of such insurance. 

Third. We have, as the third cause for industrial unrest, the de- 
velopment of large industries with their absentee ownership. Large 
business, properly controlled, is an economic benefit, but the very 
size makes coordination betw r een the employers and workers most 
difficult. There is no personal contact, hence a lack of sympathy 
and understanding. 

Where a few cents per day in the wage of the individual workman 
means hundreds of thousands of dollars annually to the business, 
and where there are so many units that one foreman can be pitted 
against another to maintain the cost of production at the lowest 
possible point, the natural tendency is to depress the wage. 

As to the remedy, I would suggest that all corporations doing 
interstate business be required to take out a national charter that 
will entail certain responsibilities and possibly grant certain im- 
munities from State control. 

This charter should not allow overcapitalization. Each board of 
directors, in addition to its other committees, should have a labor 


committee whose duty it should be to become thoroughly acquainted 
with the labor conditions of the business, and make regular reports 
thereon to the board. These reports should be published with the 
financial and other reports, and thus give the stockholders a thorough, 
understanding of the business. 

Fourth. Long working hours and insanitary conditions are addi- 
tional factors in the problem of industrial unrest. Nothing affects 
the man's physical well-being, and consequently his earning power, 
more than these. 

The remedy will be found in publicity and legislation, with factory 
inspection by competent Government officers. 

Personal experience for a number of years convinces me that in 
continuous occupation, workmen will do more work and better work 
on an 8-hour basis than on 12, and that one day in seven for rest 
must be allowed if the man is to develop the fullest degree of 

I therefore favor a national eight-hour law for Continuous labor. 

Sanitary conditions of work I have found to be a paying proposi- 
tion to the employer, as well as just and beneficial to the worker. 

Fifth. With regard to unsatisfactory rural conditions, I view with 
real concern the fact that our small landowners are becoming ten- 
ants, while the small farms are passing into the hands of a few. 

Everything possible should be done to aid and encourage our 
farmers ; the United States Government should adopt a plan for the 
scientific distribution of our agricultural products, and for a rural- 
credit system, as it is practiced to-day in some foreign countries. 

Unsatisfactory rural conditions which make it difficult for the 
small farmer to earn a decent livelihood for his family cause many 
poorly equipped young men and women to flock to the cities. As a 
rule, they are thoroughly inefficient and lamentably ignorant of the 
temptations of city life, and are rarely able to earn a living wage. 

Life on the farm should be made sufficiently attractive and lucra- 
tive to induce these boys and girls to remain there. This can be 
done only through our rural schools, which are now most inadequate. 

The education of country children must fit them for country life. 
No love of the beautiful, no patriotic gratitude to his country for 
his education can be felt by the child who spends weary months in 
uncomfortable hovels, where he receives impractical and frequently 
useless instruction. 

Our Government should aid the States in establishing comfortable 
rural schools, with longer terms and with better-paid and better- 
equipped teachers. 

In every rural school there should be departments of household 
arts that is, cooking, sewing, and millinery and manual training 
and agriculture. These schools should be open for agricultural in- 
struction throughout the summer in fact, each one should become an 
experiment station for the neighborhood. The schoolhouse should 
be the social center the meeting ground for instruction and social 

In order to satisfactorily carry out the suggestions contained in 
this report, it would be necessary to have a nonpartisan commission 
in charge of industrial questions, as suggested by the majority report 
of this commission. 


This would require large additional revenue, which must be de- 
rived by some form of taxation. 

The fairest of all taxes are the income and inheritance taxes. This 
question, however, must be carefully studied and weighed, since the 
tax is paid by one class while the benefits are largely enjoyed by 

Care should be taken that it does not become confiscatory, and thus 
stifle individual incentive and effort. 

In addition, I believe that every individual should pay his propor- 
tion, no matter how small it may be. It will inspire in him a feeling 
of citizenship and make him an integral part of our Nation. 



Report of Commissioner John B. Lennon 
on Industrial Education 


Commissioners Lennon, O'Connell, Garretson, 
Ballard, and Walsh 




The Commission on Industrial Relations gave careful study and 
investigation to the subject of industrial or vocational education. 
We found the general subject of education, whether academic, cul- 
tural or industrial, so exceedingly important and interesting to all 
classes of citizens as to warrant a brief statement covering especially 
the subject of the pressing need for industrial education and the 
bearing that such education would have upon industrial unrest. 

The terms " vocational " or " industrial " education are used to 
indicate the training given in many varieties of schools and by many 
different modes of teaching. Our attention has been almost entirely 
confined to a study of that kind of education which has to do with 
the preparation of boys and girls for useful employment in industry, 
particularly as applied to mechanical and agricultural employment. 


The great importance of this subject appears to be fairly well 
appreciated by every class of our citizenship, trade-unions, employers' 
organizations, educators, merchants, legislators, etc. The universal 
interest in this subject warrants the conclusion that its proper solu- 
tion is of paramount importance to the welfare of the Nation, in 
order to establish that kind of education that will enable the boys and 
girls of the United States to enter upon their industrial life properly 
equipped to make their lives a success. Our attention has been 
forcibly called to the fact that the great mass of the wageworkers 
are without any accumulated means. Their children are therefore 
compelled to enter gainful pursuits at an early age. Therefore the 
great need that our system of education should be so constructed 
as to equip these boys and girls with vocational and industrial 
knowledge that would make them, from the beginning, useful work- 
ers, enabling them to earn and demand a living wage and treatment 
that will not be injurious to their future welfare, as well as the 
opportunity to advance from, time to time in their chosen occu- 

Among the tramps and hoboes, also in the ranks of those who are 
employed only when labor is scarce, we have found thousands of 
graduates of grammar and high schools, some even having the ad- 
vantage of a university education, indicating that however cultural 
their education may have been it was not always of practical value 
in the mill, in the shop, or on the farm. 

Private trade schools can not remedy this. They are operated 
generally in the interest of employers and do not give the most im- 
portant element of education namely, the interest of the workers 
themselves the consideration it deserves. 



The private training school can not cover this problem. All boys 
and girls require this practical equipment, and it can be secured only 
through and in connection with our system of public schools. To 
properly perform this duty, the general responsibility rests on all 
our people. It is a public and not a private function, and the State 
and Nation must be held responsible for its early and successful 

The needs of modern industry do not seem to be met by any exist- 
ing scheme of training for general usefulness in the crafts or for 
the development of all-around mechanics. Therefore, the pressing need 
is for a general educational policy that will make possible a con- 
tinuous development of both adults and minors in industry who are 
over 14 years of age. Boys or girls who go into the shop at 14 or 
Jater develop into specialists but not mechanics. If for any reason 
they lose their job they are no more fit for another place than they 
were when they first began. The work, therefore, that must be done 
for those already in industry is to train them to fit into work wher- 
ever help is required in the shop. 

Our public schools must be prepared and required not only to give 
some vocational consideration to pupils over 14 years of age who 
remain in the schools, but to provide for compulsory continuation 
daytime schools on the time and at the expense of employers, and 
voluntary night schools for both academic and vocational training 
for boys and girls who are at work and for adults who desire further 
knowledge which will be of use in their vocation. 

We hold that all experience shows conclusively that public instruc- 
tion privately controlled or any plan that fails to comprehend the 
entire number of pupils in the United States is dangerous and 
unworthy of support. 

We hold that the advantages of vocational education should be 
open to all adults or minors in the public schools if they remain after 
14 years of age, and in night schools and continuation schools after 
they enter industry, and these advantages we believe should be pro- 
vided entirely at public expense. 

There seems to be but slight, if any, advantage to be obtained by 
undertaking vocational training of pupils before they reach the age 
of 14. Their entire time prior to that age is required to lay a founda- 
tion for what may be termed their general education. This 'being 
true beyond any question, the State must provide for education after 
entrance into industrial life as well as before. Fairness to all classes 
demands the opportunity for vocational teaching after the boy or 
girl of 14 or over has entered industry. 

The children of the well-to-do parents are continued at school 
through the several years of high-school work entirely at public 
expense, in order to fit them for professions and business life. Is it 
unreasonable that the public should equally provide schooling for 
those who, because of economic pressure, must enter industry at 
from 14 to 16 years of age? 

This the working class demands for their children, and it must be 
provided if our public-school system is to continue to hold a high 
place in the respect and esteem of all classes of our citizens. In a 
Republic such as the United States, the school system should be 
adapted to the needs of all classes, rich and poor; those who are to 


enter professions and those who are to go into the shop, the factory, 
the mill, or to work upon the land. 

We believe it to be assured that if all our schools will extend prac- 
tical vocational teaching to cover instruction after 14 years of age, 
a very large number of pupils will remain at school until the age of 
16 or even later, if the school is providing for their future usefulness 
and success as well as or better than can be done in the factory. This 
is the most important element in the consideration of the subject of 
industrial training. Keep the children at school as long as possible, 
extending their vocational knowledge, widening their academic train- 
ing, teaching them not only their rights but their duties as citizens 
of our Republic, stirring their ambition for a life worth living, and 
making of them dear men and women rather than cheap. 

It can not be denied that our public schools, as now gener- 
ally conducted, do not accomplish as much work that is substantially 
effective in fitting their pupils for productive labor with their hands 
as should be the case. We must have a plan of education in the 
school that develops both the power to think and the power to do. 

We find that as a rule the first eight years of the school life of a 
boy or girl must of necessity be very largely, if not entirely, devoted 
to work of a cultural character, for the reason that up to the age of 
14, when the first eight years of school life are completed, neither 
boys nor girls have developed any clearly defined likes or dislikes 
as to what their life work shall be, nor can either parents or teachers 
be considered safe guides as to the careers of children of that age. 
Justice, as well as the best interest of the pupil, demands that the 
desires and wishes of the child shall have primary consideration in 
the determining of his life work, and to assign this work arbitrarily, 
either by the school board, the teacher, or even the parents, is not 
much less than criminal. 

The schools should provide the greatest possible variety of occupa- 
tions, making the opportunity of choice as varied as possible. And 
this vocational training should be in the same building as that where 
the child spends his first eight years in school, in order that by 
observation of the vocational work and by contact with the pupils 
and vocational teaching, he shall have every possible opportunity to 
determine what he wants to study for a vocation. 

Industrial education in the United States is on trial. It will and 
should be judged by practical men and women, and that course should 
be pursued which promises the best possible results. 


It is believed that all vocational schools should be a part of the 
public school system; that they should be entirely free, supported 
by the National, State, county, or city government ; that all textbooks 
and equipment should be furnished to the pupils free; and that a 
plan of management of such schools should be developed which 
would give to the workers and employers in each community, in the 
State, and in the Nation, a potent voice in their entire control, in 
conjunction with the regular boards of school officials. As to voca- 
tional school work, the committee in control should consist of an 
equal number of members representing organized labor, organized 
38819 16 17 


employers, and the regularly constituted school authorities, a ma- 
jority of whom would be required to finally determine practices and 
methods. Every vocational teacher should be a practical man or 
woman from the trades or occupations taught; and the product, if 
any, of such schools, should not be sold on the market in compe- 
tition with regular industry. Ample opportunity exists for the use 
of any possible product of the vocational schools by the city, county 
or State. 


The establishment of vocational schools for all children in school 
over 14 years of age is advocated, as well as compulsory continuation 
and night vocational schools, with such academic work as may be 
advisable for all persons over 14 years of age in industry and agri- 

Education vitally interests all our people and neither money nor 
time should be spared to make the education of the United Statea 
the most thorough, the most potent for human uplift and progress, 
of any system of education in the world. To lead in this great 
work is our proper position, not to follow. Thoroughness should be 
the aim of our Nation and our States. Poorly trained workers in 
industry are now entirely too plentiful. This should be overcome by 
excellent vocational training. We believe there are now too many 
cheap workmen. This Nation should work for men, women, and 
children who will not consent to cheapness, either in wages, condi- 
tions of labor, or character. 

The public schools, whether academic or vocational, should be 
entirely neutral as to unions and their control, and exactly the same 
should be true as to the exercise of any control for class interests 
by employers or employers' organizations. And surely there is no 
room in our schools to warrant the teaching of any degree of hos- 
tility toward trade unions or employers' organizations. 

The general recommendations of the special commission on na- 
tional aid to vocational education have our most hearty approval and 
we approve of the passage of a law by the Congress of the United 
States with that end in view. The need of the States for such assist- 
ance is clearly set forth. 

It is recommended that Congress authorize by law the creation 
of a Federal board to administer funds appropriated by Congress 
to the several States for vocational education, the board to consist 
of three members, one educator, one representative of organized 
labor, and one representative of organizations of employers, to be 
appointed by the President with the consent of the Senate, to serve 
for a term of six years, the first appointments to be for two, four, and 
six years ; with salaries of $8,000 each per annum ; the Federal board 
so constituted to establish rules and standards for expenditure of 
Government funds awarded to the several States. 

The Federal board shall require of each State asking for Govern- 
ment funds the adoption of the following standards before any 
awards can be made or funds be appropriated by the board : 

1. Compulsory daytime continuation schools for all children in industry 
between the ages of 14 and 18 years, for not less than five hours per week, at 
the expense of their employers. 


2. Night schools for all persons over 18 years of age who are desirous of 
further educational opportunities, either cultural or vocational. 

3. Standards of efficiency for teachers. 

4. Joint State control in administration of vocational education by public- 
school authorities, organized labor, and organized employers, with equal repre- 

5. The Federal board to establish some model schools for industrial training 
in agriculture and vocations, as examples to the several States. 

This problem of vocational education not only is important mate- 
rially but is intimately a human problem, involving as it does the 
social welfare and progress of all the people. 

The boys and girls of the farm, if assured by proper education of 
becoming generally successful farmers, will remain farmers, rather 
than undertake to compete in the industries with properly trained 
workers of the cities. This will help to solve the problems that 
are threatening injury to our great agricultural industries, and will 
eliminate a cause of industrial unrest. 

In the farming districts the country school remains practically as 
it was 50 years ago. Pupils are not taught what is essential to de- 
velop them into excellent farmers and farmers' wives, but the cultural 
education of days gone by is continued, to the considerable exclusion 
of teaching how to farm and how to manage a farmer's home. Surely 
the Nation has here a mission of helpfulness to perform that which, as 
a great nation, it can not longer afford to leave largely neglected. Its 
prosperity as a nation depends upon the character and efficiency 
of its men and women much more than upon its geographical position 
or the quality of its soil, and to build character and effectiveness we 
must lay the foundations well by a proper education of our boys 
and girls. We should not strive merely for educating them into cor- 
rectly working automatic machines. The human side must be upper- 
most and receive attention of the most careful nature. It is not 
worth while to make square holes and then try to fit into them round 
men and women. 

Education should take into account, at erery stage, manhood and 
womanhood, and where and how the life is to be surrounded, and 
what can be done through education to make each life successful 
and therefore worth while. Dexteritv is worth while, but good char- 
acter is more vital to real service in the world of industry and 
civilization. At present our schools in city and country do not make 
good, either in the development of skill, in the duties of service, or 
in a clear understanding of human rights and consequent human 
duties toward our fellows. Industrial education can not possibly 
take the place of industrial experience. All that can be hoped for 
is that our schools will make their teaching a real preparatory 
process for entering upon industrial life, with proper conception of 
life work instead of no conception at all. 


All minors entering industry after 14 years of age are entitled to 
further aid from organized society in order to enable them to com- 
plete their vocational and cultural education. This is possible only 
through the establishment of compulsory day time continuation 
schools of at least five hours per week, at the expense of employers, 
and night schools. The eagerness with which minors and adults 


take advantage of such schools is sufficient evidence to warrant legis- 
lation giving these opportunities to all minors and to such adults as 
may care to take advantage of them. These schools, in order to be 
of value, must be compulsory upon all minors in industry up to at 
least 18 years of age. Schools in the United States should meet fully 
the needs of every class of pupils, those who expect to enter colleges 
and prepare for the professions as well as the much larger class that 
is to enter industrial life. The parents of the wageworking class 
contend, with much reason, that their children are not given the same 
vocational consideration under our present school systems as are the 
children of the well to do who expect to become lawyers, doctors, etc. 
The State has established schools to train, for a useful industrial 
life, the mentally, morally, and physically deficient, and this effort 
has the hearty approval of every good citizen. If this work is worth 
doing, then it must be of vastly greater importance to establish one 
general scheme of education so as to make useful men and women 
out of the normal boy and girl, and neither expense nor investigation 
should be spared to accomplish this most desirable object. 


It seems self-evident that no one can successfully teach others that 
of which he has no knowledge himself. We recommend, therefore, 
in the selection of teachers to impart trade education that only prac- 
tical workmen shall be used. They should be selected with care as 
to character, and, as far as possible, craftsmen should be selected as 
trade teachers who have a considerable degree of cultural education. 
The opportunity should be continually extended for the proper edu- 
cation of teachers capable of teaching vocations, and, in so far as it 
may be advantageous, academic education also. The need of well- 
developed brain power is not waning in the least. What is demanded 
is the educated hand to apply in industry the ideas and knowledge 
of the brain. Our children need to know more as to their economic 
value and more of their social duties and responsibilities. The 
schoolhouse is the place where much of this should be taught, in 
order that the duties of honorable citizenship shall be appreciated. 
Real social service is the highest attainment the individual can 
aspire to reach. All education is of value in life, and the State 
should properly be held responsible for the education of her chil- 
dren, in order that the best possible use shall be made by the greatest 
possible number of the opportunities of life as they present them- 
selves from year to year. 


The existing system of public education is inadequate. The present 
specialization of shop conditions is not favorable to a complete 
mastery of any trade or calling in the shop, store, or industry. This 
being admittedly true, it devolves on our public-school system to 
meet adequately the emergency in conjunction and cooperation with 
industry. The temperamental difference in children must have con- 
sideration in determining their life work and preparation therefor. 
The boy or girl must not become merely a cog in the great wheel of 
industry. Therefore the urgent need of vocational education in con- 


junction with practice in the shop or factory that makes each indi- 
vidual in a few years capable to fit into any place in the industry 
where help may be required. We now have too many handy men 
and specialists, who Imve no place into which they can fit when for 
any reason their particular work is no longer required. 

Vocational education, on account of the wonderful changes in 
industrial production, must take the place of apprenticeship. To 
solve this problem right is to find a solution for much of the unneces- 
sary social unrest of our day and generation. 

There can be no question that industrial education is coming 
rapidly. Prejudiced opposition will be futile. The necessity is great 
and it must and will be met. The National Government should 
properly perform its full share of the responsibilities of meeting this 
demand for the best and fullest education of pur children. 

The entire subject is dealt with exhaustively in the report of 
the Special Commission on Vocational Education, which submitted 
its report June 1, 1914. 










At regular sessions of the commission with all members present, 
the following resolutions were offered for adoption as a part of the 
commission's report to Congress. The members of the commission 
whose names appear in connection with the various resolutions voted 
for their adoption and thereby made the resolutions a part of their 
individual reports to Congress. 


Whereas the commission finds that the terms " open shop " and " closed 
shop " have each a double meaning, and should never be used with- 
out telling which meaning is intended, the double meaning consist- 
ing in that they may mean either union or nonunion: Therefore, 
for the purposes of this report, be it 

Resolved, That the Commission on Industrial Relations will not 
use the terms " open shop " and " closed shop," but in lieu thereof 
will use " union shop " and " nonunion shop." 

The union shop is a shop where the wages, the hours of labor, and 
the general conditions of employment are fixed by a joint agreement 
between the employer and the trade-union. 

The nonunion shop is one where no joint agreement exists, and 
where the wages, the hours of labor, and the general conditions of 
employment are fixed by the employer without cooperation with any 

Wherever the terms are used in this report, they bear the interpre- 
tation as set forth above. 


The sources from w^hich industrial unrest springs are, when stated 
in full detail, almost numberless. But, upon careful analysis of their 
real character, they will be found to group themselves almost with- 
out exception under four main sources which include all the others. 
These four are: 

1. Unjust distribution of w:ealth and income. 

2. Unemployment and denial of an opportunity to earn a living; 

3. Denial of justice in the creation, in the adjudication, and in the 
administration of law. 

4. Denial of the right and opportunity to form effective organiza- 

We recommend that private ownership of public utilities be abol- 
ished and that the States and municipalities take over the same under 



just terms and conditions, so that they may be operated by the States 
or municipalities. 



We find that the limitation of the right of suffrage to men has been 
a most serious handicap to women in industry in their long and 
splendid struggle to secure compensation for their labor, humane 
working conditions, and protective laws. 

We recommend that private ownership of coal mines be abolished ; 
and that the National and State Governments take over the same, 
under just terms and conditions, and that all coal lands shall there- 
after be leased upon such terms that the mines may be cooperatively 
conducted by the actual workers therein. 

All religions, the family life, the physical well-being of the worker, 
the integrity of the State, and the comfort and happiness of man- 
kind require that no human being shall be permitted to work more 
than six days in each week. This commission refuses to recognize 
any claim of so-called business expediency or alleged domestic or 
public necessity which ignores this elemental and righteous demand. 
We therefore suggest that stringent laws be passed by State and 
Nation making it an offense punishable by fine and imprisonment to 
permit any person to work more than six days in each week. 

We find that practically nothing has been done toward the very 
necessary development of organizations of women engaged in do- 
mestic service, and that no standards governing the toil of the thou- 
sands thus engaged have been established. 

As a necessary step in this direction we recommend that the hours 
of such workers should be limited to eight per day; that no such 
persons be permitted to work over six days in each week; that a 
minimum wage be fixed for this class of employees which will insure 
them a comfortable life without being required to live in the homes 
of persons employing them, where they may be subjected to objec- 
tionable or uncomfortable living conditions. 

That all of the improvements and safeguards recommended for 
adoption in this report as applying to women in other lines of in- 
dustry shall apply with equal force and effect to women engaged in 
domestic service. 

We find that the direct and proximate cause of the killing of men, 
women, and children, destruction of property, and looting of the 
homes of the striking miners in the southern Colorado coal fields 
during the strike therein was the arbitrary refusal of the coal-mine 
operators to meet and confer with the representatives of the workers 
in their several mines. Inasmuch as the officials of the Colorado 
Fuel & Iron Co. admit that said company fixed the prices and con- 
ditions of labor in the State of Colorado at the time in question, 
after fully considering and weighing all of the testimony advanced 
at the public hearings, and especially the admissions and declara- 
tions of the officers and directors of the Colorado Fuel & Iron Co., 
including Mr. John D. Rockefeller, jr., we find that the final and full 
responsibility for the refusal to confer with said representatives, and 
for all the deplorable results which followed such refusal, must be 


placed upon Mr. John D. Rockefeller and Mr. John D. Rocke- 
feller, jr. 

We wish to report to your honorable body that Mr. John D. Rocke- 
feller, jr., and Mr. W. L. Mackenzie King, witnesses regularly called 
before this commission, refused to answer questions relevant and 
material to the inquiries provided for in the act of Congress creating 
this commission, as shown by the excerpts from the official transcript 
of the testimony filed herewith and attached hereto, and we therefore 
recommend that the said witnesses be summoned by the House of 
Representatives, according to its usual procedure, immediately upon 
its convening, or as soon thereafter as may be reasonably convenient, 
and that said questions again be propounded to said persons, and that 
they be compelled to answer the same. 


Chairman WALSH. What salary do they pay you? 

Mr. KING. That is a matter you do not have a right to inquire into. I was 
asked if I would undertake this work for a period of years. I said I would 
not, that all I would undertake to do was to take it for a year ; that I wanted 
to be perfectly free at the end of a year to terminate my arrangement with the 
Rockefeller Foundation if I did not see it was going to give the opportunity 
for the practical results I wanted to get. I made an undertaking with them 
on that basis, with that understanding, and they asked me to take it for another 
period of time, and I refused, and I made the further stipulation that if by 
any chance an election should be brought on in Canada, I should resign before 
that time. I think under those circumstances the public would hardly expect 
me to answer what particular remuneration I am receiving. 

Chairman WALSH. Are you going to make your report to anybody? Are you 
going to give anybody these facts that you are collecting, the result of these 

Mr. KING. No, sir; I have not decided that, but if you mean am I going to 
give them to anybody connected with the Foundation or Mr. Rockefeller, I 
would say no. 

Chairman WALSH. Are you going to give them to the Government? 

Mr. KING. No. 

Chairman WALSH. Are you going to give them to the organizations of 

Mr. KING. I will give them the results. 

Chairman WALSH. But as far as the facts are concerned, your purpose is to 
keep them absolutely secret? 

Mr. KING. No, sir ; I would not be telling the truth to say that. 

Chairman WALSH. Who are you going to tell them to? 

Mr. KING. On that I shall use my own judgment. 

Chairman WALSH. Did you talk to the president or secretary or treasurer 
of the United Mine Workers of America in Denver? 

Mr. KING. I have said already, Mr. Chairman, that I desired to have re- 
garded as confidential the persons that I saw. 

Chairman WALSH. Did you call upon the president, the secretary, or the 
treasurer of the State Federation of Labor of Colorado? 

Mr. KING. I have already stated that I intend to regard as confidential 
the interviews that I had in Colorado. That is my position in regard to 
that. * * * 

Chairman WALSH. I asked if you saw the president, the secretary, or the 
treasurer of the United Mine Workers of America or the president, the secre- 
tary, or the treasurer of the State Federation of Labor of the State of Colorado? 

Mr. KING. I remain just exactly where I put myself before. 

CHAIRMAN WALSH. You refuse to answer that question? 

Mr. KING. I refuse to disclose any of the interviews I had in Colorado ; and 
let me make this perfectly plain, Mr. Chairman. I saw some of the persons you 
have mentioned 

Chairman WALSH (interrupting), Name them. 


Mr. KING. No ; I will not. I do not intend to disclose the names, and I do not 
intend to let the impression go abroad that I avoided seeing anyone, not for one 
minute. * * * 

Chairman WALSH. Did you find it [industrial unrest] very bitter in Colorado? 

Mr. KING. I prefer not to discuss the Colorado situation at all. 

Chairman WALSH. Please outline for this commission the policies which you 
consider should be put into effect in Colorado in the industry of the Colorado 
Fuel & .Iron Co. 

Mr. KING. No, Mr. Chairman. I have said I do not desire to discuss the 
Colorado situation. 

Chairman WALSH. Do you consider that the miners in Colorado were justified 
in demanding a recognition of their national union? 

Mr. KING. I have already said I don't care to discuss the merits of that 
strike one way or the other. 

Chairman WALSH. Where do you keep them [referring to notes Mr. King 
testified he had made in Colorado] ? 

Mr. KING. I am not going any further in my answer. 

Chairman WALSH. Think again, and maybe you will go further ? 

Mr. KING. No ; I won't. 

Chairman WALSH. Are they in charge of anyone else or in your possession? 

Mr. KING. That is my affair, Mr. Chairman. 

Chairman WALSH. Are they kept in New York or Washington or at your 

Mr. KING. They are not kept either in New York, Colorado, or at my home at 
this moment. 

Chairman WALSH. In Washington? 

Mr. KING. I have nothing further to say. 

Chairman WALSH. It is a dead secret? 

Mr. KING. Yes; a dead secret. 


Chairman WALSH. It is not in a letter. It was in a newspaper statement. 
Did you write your own newspaper statements, or were they dictated, or were 
they written by some one else? 

Mr. ROCKEFELLER. I assume the responsibility for everything that was sent 
out in my name. * * * 

Chairman WALSH. Did Mr. Ivy Lee write the newspaper interviews purport- 
ing to come from you? 

Mr. ROCKEFELLER. I have answered the question. 

Chairman WALSH. Do you assume the responsibility for that? 

Mr. ROCKEFELLER. For everything that goes out in my name. 

Chairman WALSH. I am asking for the fact. Did you write it? 

Mr. ROCKEFELLER. I have covered the situation, Mr. Chairman. 

Chairman WALSH. You do not care to go any further? 

Mr. ROCKEFELLER. I do not. I do not think it necessary. 

Chairman WALSH. Did you write that answer? [Referring to the prepared 
statement which Mr. Rockefeller read upon the stand.] 

Mr. ROCKEFELLER. I take the responsibility for that entire answer. 

Chairman WALSH. Did you write it or did somebody else write it for you? 

Mr. ROCKEFELLER. It is not a matter that I think is material. 

Chairman WALSH. Did Mr. Lee write it? 

Mr. ROCKEFELLER. I have no further answer to give. 

Question. What agreements or understanding, verbal or written, exist be- 
tween the Foundation and Mr. King, regarding the scope of the work which is 
to be done under his direction, and the method of investigation which is to be 
pursued ? 

(a) By whom was the arrangement with Mr. King made? 

Answer. Mr. King was appointed pursuant to a resolution adopted at the 
meeting of the executive committee of the Rockefeller Foundation held August 
13, 1914, of which the following is a copy : 

" Resolved, That William Lyon Mackenzie King be, and he is hereby, ap- 
pointed to make a comprehensive study of the problem of industrial relations 
at a salary of $ a year from October 1, 1914. 

" It was, on motion, further 

" Resolved, That the secretary be authorized to approve all bills for neces- 
sary traveling expenses and all other expenses incurred by Mr. King in the 


pursuance of his work under the direction of the executive committee. The 
secretary presented a recommendation from Mr. King for the employment of 
Robert F. Foerster, Ph. D., to prepare a catalogue, etc." 

The amounts of the salaries have been omitted as being information of a 
confidential nature not material to this inquiry. 


The money with which the Rockefeller Foundation was created 
and is maintained consists of the wages of workers in American in- 
dustries. These wages were withheld by means of economic pressure, 
violation of law, cunning, and violence practiced over a series of 
years by the founder and certain of his business associates. 

Under the law as it now exists, it is impossible to recover this 
money and pay it over to the equitable owners. We therefore recom- 
mend that appropriate legislation be passed by Congress, putting an 
end to the activities of this foundation, wherever the Federal law can 
be made effective, and that the charter granted by the State be re- 
voked, and that if the founders have parted with the title to the 
money, as they claim they have, and under the law the same would 
revert to the State, it be" taken over and used by the State for the 
creation and maintenance of public works that will minimize the 
deplorable evil of unemployment, for the establishment of employ- 
ment agencies and the distribution of labor, for the creation of sick- 
ness and accident funds for workers, and for other legitimate pur- 
poses of a social nature, directly beneficial to the laborers who really 
contributed the funds. 





38819 16 18 273 


WASHINGTON, D. C., December 29, 1913. 

Present : Frank P. Walsh, chairman, Missouri ; John R, Commons, Wiscon- 
sin ; Mrs. J. Borden Harriman, New York ; Frederic A. Delano, Illinois ; Harris 
Weinstock, California; S. Thruston Ballard, Kentucky; John B. Lennon, Illi- 
nois ; James O'Connell, District of Columbia ; Austin B. Garretson, Iowa, com- 

The commission met, pursuant to adjournment of Saturday, October 25, 
1913, at 10 o'clock a. m. 

Commissioner COMMONS. There are two corporations which have recently 
been formed that are represented here. One is called the National Council of 
Industrial Safety. The men concerned with that are Mr. J. D. Beck, Mr. W. H. 
Cameron, and Mr. R. W. Campbell, president of that council, and Mr. C. W. 
Price. Those four men represent the National Council of Industrial Safety. 
That council represents the expert safety men of the largest corporations of 
the country. They propose to tell the work that they are doing and how their 
organization is effected, what its purposes are, and the results that they have 
accomplished, and to offer cooperation of some kind with this commission. 
The other organization is a newly created one of the State and Municipal 
Bureaus of Labor Employment. The men who represent that are Mr. Croxton, 
who was formerly in the Bureau of Labor here in Washington, and is now at 
the head of that w^ork in Ohio. 

Commissioner GARRETSON. Was he with the Labor Bureau of the Interstate 
Commerce Commission 

Mr, LAUCK. The Bureau of Labor Statistics. 

Commissioner GARRETSON. Was he not detailed for service with the com- 
mission just before leaving? 

Mr. LATJCK. That was just in an advisory capacity. 

Commissioner GARRETSON. That may have been so. I knew the man as an 
Interstate Commerce Commission man, but not a Department of Labor man. 

Mr. LAUCK. No ; he was from the Bureau of Labor Statistics, and was over 
there advising about railway wage statistics. 

Commissioner O'CONNELL. What is his name? 

Commissioner COMMONS. Croxton. The other interested party is L. A. Hal- 
bert, who has charge of the work in Kansas City, and who has done some good 
w r ork in connection with employment offices. The third man, Mr. William 
Leiserson, has charge of the employment offices in Wisconsin. 

These people have recently effected a national organization extending from 
Massachusetts to Oregon, of an organization of public employment offices, and 
are working out plans of uniformity in interchange, and are thinking of a 
large organization to develop that line of work throughout the country. 

Those two organizations are here as organizations, or at least as individuals 
in an executive capacity in those organizations, and they have definite and 
specific things in mind to bring up. 

On farm labor there are two people here, Mr. Charles W. Holman, of the Uni- 
versity of Texas, who has knowledge of the Renters Union, of the I. W. W. 
organization of farm laborers in Texas, and Mr. Herbert Quick, representing 
one of the agricultural papers. These men would naturally come at the same 
time when the consideration of other employment questions come in. 

Commissioner DELANO. Who is that? 

Commissioner COMMONS. Charles W. Holman and Mr. Quick, a newspaper 
man. I took up the matter of inviting these people and talked it over with 
Commissioner Walsh, with the idea that we would get before us three large 
movements in general that are going on, that we would have to take account 
of, and those who are urgent in getting a hearing first would be the Council 



of Safety men. They would like to close up at one continuous session and 
then get away. They must get away this evening. The others will be like 
Mrs. Kelley. Now, if there are any other individuals like Mrs. Kelley who 
wish to be heard to-day 

The CHAIRMAN. After these names were agreed upon by Prof. Commons and 
myself I talked to Mrs. Harriman, and she thought she would like to have two 
who would pay particular attention to woman and child labor, and at Mrs. 
Harriman's suggestion I invited Mrs. Florence Kelley and Mrs. Ilobins, and 
they are here. 

Commissioner HAEEIMAN. You might speak of the matter of the advisory 

The CHAIRMAN. Yes. Mrs. Harriman had an idea that it might be a good 
thing to have an advisory board of women throughout the country, but that 
will come up later. Are they going to make some suggestions about that? 

Commissioner HAEKIMAN. They are on that board, and they are going to make 

The CHAIEMAN. Mrs. Harriman, you asked a number of women throughout 
the country to cooperate with us as an advisory board? 

Commissioner HAEEIMAN. The idea of that was that we would try to get 
both radicals and conservatives, so that they could go along with us and make 
suggestions and criticisms on the question of woman and child labor rather 
than oppose us and tear everything to pieces. 

Commissioner O'CONNELL. You have succeeded, as far as those two are con- 

Commissioner HAEEIMAN. In getting radicals? 

Commissioner O'CONNELL. Yes. 

Commissioner HAEEIMAN. Do you not think it is a good idea to have their 
suggestions and that it is better to have them with us than to have them going 
after us and tearing everything to pieces? 

Commissioner O'CONNELL. You have succeeded at the start, anyway. 

Commisssioner COMMONS. May I ask the members of this National Council 
of Industrial Safety to come before us now? 

Commissioner HABEIMAN. I had a letter about that man who is going to 
Australia. He is going to start to-morrow r , I think. Chairman Walsh has the 
letter. He is going to Australia on some other business and make some investi- 
gations for us, and as he is here and can be seen to-day it might be a good 
thing to invite him up. 

The CHAIEMAN. Mr. Lauck took that up with me this morning, but we con- 
cluded we did not have time to hear him to-day. 

Commissioner HAEEIMAN. While I was in New York I found that he was 
considered to stand very high. I do not know him myself. 

The CHAIEMAN. Mr. Lauck thought we could not do anything worth while 
in the time he had if he had to go to-morrow. 

Commissioner GAEEETSON. He could not make anything plain in that time. 

Commissioner COMMONS. I was going to ask whether \ve shall hold an evening 
session. If so, we might ask Mrs. Kelley and Mrs. Robins to appear this even- 
ing and be sure of finishing the hearing with these other people this morning 
and this afternoon. 

Commissioner HAEEIMAN. Anything will suit me. 

Commissioner GAEEETSON. If they are going away to-night, we will accommo- 
date them in any way we can. 

Commissioner DELANO. This Safety Committee are going away this afternoon. 

Commissoner BALLAED. Our commission has employed a managing expert and, 
as I understand, w r e propose to put into various fields experts selected by our 
managing expert, and probably men who are recommended to the commission, 
and finally to be employed by the commission after careful examination ; and I 
had the impression that these experts were the ones on whom we were to rely 
for our facts and for our work ; and the mere fact that a very good man is going 
to Australia is no particular reason why this commission should employ him or 
even be in particular communication with him to make any investigation on 
which the commission is to rely. I should imagine that before our commission 
expires w r e will probably want to send some one, possibly to Australia or else- 
where, to make such investigations as we feel we need ; but I imagine that the 
investigators that this commission will employ will be persons who have been 
very carefully recommended and very carefully considered, to be sure that they 
will make such investigations as we need absolutely without bias, and so that the 
commission may rely upon the information which they furnish to us. I am sat- 


isfied that a great number of reports that have been made have been more or 
less biased, and therefore the commission could not accept their conclusions as 
final. We will be able to make our own investigations, and I am inclined to 
think that the only experts this commission should have in. the field are those 
who have been carefully considered, carefully investigated, and then carefully 

Commissioner LENNON. Mr. President, it seems altogether advisable to hear 
these other people first. The matters that the chairman desires to submit, 
which have been referred to by Mr. Lauck and Mrs. Harriman and others may 
take considerable time for discussion. Suppose we get rid of this hearing and 
then have our executive session, when we can spend a whole day at it. Is it a 
matter that can not lie over? 

The CHAIRMAN. No ; not at all. I understood we had got past that point and 
that we are going to hear these Council of Safety people. 

Commissioner LENNON. Then I move that we begin the hearings, commencing 
with these safety appliance people, followed by the two women, and then the 
others just as rapidly as we can reach them. 

Commissioner COMMONS. I second that motion. 

Commissioner WEINSTOCK. Would it not be well to fix a time limit? Other- 
wise some of these gentlemen may keep us here two hours at a stretch. 

The CHAIKMAN. I think they have all been warned by Commissioner Com- 

Commissioner O'CONNELL. They will not all want to talk. 

Commissioner COMMONS. There will be no reiteration. 

Commissioner WEINSTOCK. Sometimes when you get an enthusiast before you 
he overlooks his good stopping points. 

Commissioner GARRETSON. His brakes get out of order. 

Mr. LAUCK. How about the two women ? - 

The CHAIKMAN. Let them follow immediately. 

Commissioner HARRIMAN. Before they come may I say a word in explanation 
of why they were asked and what the idea was? 


Commissioner HARRIMAN. We had so many applications, so many people 
writing to us all the time, asking what was going to be done in the way of 
woman's work especially, that we thought we would take everything relating 
to women and children and put them in one column, and then eventually throw 
them all back again for a final report, and that we would consider the ques- 
tions as to the policies that need to be changed. That was the idea Mr. Lauck 
and I had, and then we thought if we could get an advisory committee of 
women who were interested in that question, to work throughout the country, 
and if they could come on here semioccasionally if there was any necessity for 
it, and hold a meeting, and also if we could send them reports of work as we 
went along, once in a while, and get their criticisms on it, it would in the end 
make it much simpler for us than if we did not listen to them and they were 
ready to tear everything to pieces. 

Commissioner LENNON. Most of the women's organizations of the country 
have written to me, stating that because I have worked with them they ex- 
pected me to look after the interests of women and children in this investiga- 
tion. I have worked with them all of my life, and have always worked more 
with w r omen than with men. That was the reason they expected me to look 
after their interests. I told them we had a woman on the commission, and I 
turned their attention toward her to get their work done, telling them at the 
same time that I would help if I could. 

Commissioner HARRIMAN. That is probably the reason why so many of them 
have written to me. We can work together. 

Commissioner LENNON. All right. 

Commissioner HARRIMAN. Would you like to know the names of the women 
who have been proposed for the advisory committee? 

The CHAIRMAN. We will get at that later. Is there any further discussion 
of the motion? 

Commissioner DELANO. Has the advisory committee been appointed, or only 
recommended ? 

Commissioner HARRIMAN. They have been invited. 

Commissioner O'CONNELL. I am interested in the women, of course, and 
believe in the investigation of these questions, but I do not propose to let the 
women go so far that they may backfire and then put the blame on somebody 


Commissioner DELANO. The only thing that occurs to me is that if we ap- 
point an advisory committee of \vomen, will we not be in a position where we 
can not decline an advisory committee of miners, an advisory committee of rail- 
road men, and advisory committees of various other organizations and in- 
terests ? 

Commissioner HARRIMAN. This is not for the commission. It is just in con- 
nection with that department, to sho\v them that we had taken up the question 
of the work of women and children. It had nothing to do with the commission 

Commissioner O'CONNELL. It is a division of the commission's work, though ? 

Commissioner HARRIMAN. Yes ; but it was a kind of informal thing and they 
could be dropped at any time we wanted to do so. 

Commissioner GARRETSON. With the power of suggestion only? 

Commissioner HABBIMAN. Yes. 

Commissioner WEINSTOCK. That is all we have. 

Commissioner HABBIMAN. We are never really going to get them together. 

Commissioner WEINSTOCK. Are they not supposed to come together and meet? 

Commissioner HABBIMAN. No. We said if necessary we would call them 

Mr. LAUCK. But the idea was never to get them together, because that would 
be an impossible situation. 

Commissioner LENNON. And I think a most dangerous situation. 

Commissioner HABBIMAN. Could not the commission dispose of the question? 
I can easily tell them, without hurting their feelings. 

Commissioner O'CONNELL. It is perfectly right for whoever has charge of 
that department to advise with women in every way possible. 

Commissioner WEINSTOCK. I want to raise the point of order that there is 
a motion before the house. 

Commissioner LENNON. I had a very pleasant interview with Miss Adams a 
week ago, and she said she had had a very cordial invitation to pay her fare 
to Washington any time she wants to make any suggestion, but that she did 
not think she was likely to come. 

Commissioner HABBIMAN. That was not what she said. She said if they 
wanted her, if they felt it was necessary, she would pay her fare. 

Commissioner DELANO. Miss Adams would be more bashful about coming 
forward than some of them. 

Commissioner LENNON. These safety people are here, and we can give them 
a hearing. They are here on the ground, and I renew my motion that we give 
preference first to the safety men, and then to the ladies. 

The CHAIRMAN. It has been moved and seconded that we proceed with the 
business of hearing those who have been mentioned by Commissioner Commons 
and Mrs. Harriman, hearing first the gentlemen on safety and sanitation, and 
next the ladies. Are there any remarks on the motion? 

The motion was agreed to. 

The CHAIRMAN. We will hear Mr. Price and his party first. 

Commissioner BALLABD. This hearing is entirely open? 


Commissioner DELANO. Is there any particular reason why the gentlemen 
must be heard first? 

Commissioner LENNON. The only reason why I offered that motion was 
because of the seeming necessity for them to get away. There is no other 

Commissioner COMMONS. They are very anxious to get away. 

The CHAIRMAN. Dr. Price, we have concluded to hear you gentlemen first 
on this question of safety and sanitation, and we thought we would lot you 
divide it to suit yourselves. I have mentioned you by name, because I spoke 
to you before. 

Mr. PRICE. Mr. Beck will make the first statement. 

The CHAIRMAN. Mr. J. D. Beck, of the Wisconsin Industrial Commission, 
formerly labor commissioner, will first address the commission. 


Mr. BECK. Mr. Chairman and members of the commission, I happen to have 
been labor commissioner for six years prior to the enactment of the industrial- 
commission law in our State, and, as such, I felt that we had done some things 
in Wisconsin and were doing some things ; we were encouraged in that belief by 


investigations that were made of the work of the department by various philan- 
thropic societies and others coining into the State and looking over our records 
and the work; yet, from year to year, we could discover that the factory and 
other industrial accidents were increasing, and the prosecutions for violation 
of our laws increased from a few per year up to 365 a year, which was an 
average of one a day. That seemed to be the measure by which our work was 
judged. It seemed to me that something was wrong. We were having a great 
many prosecutions, it is true, and the laws were being enforced as well as 
we felt that the laws themselves and the courts of our State would permit 
them to be enforced. 

In 1907 we started an investigation of industrial accidents and workmen's 
compensation. That investigation was made by the deputy of the department, 
Mr. Lorenz, who was assistant professor of economics in the University of Wis- 
consin at the time he was appointed. He went into the study somewhat ex- 
tensively, and his report was turned over to a legislative committee, appointed 
at the next session of the legislature, who thought the subject was of sufficient 
importance to require further inquiry, and a committee of that legislature was 
appointed to make a further study of the subject. The chairman of that com- 
mittee was Senator Sanborn, of our State. He began holding hearings around 
at various industrial centers, taking such data as he could find on the subject 
of accidents, employers' liability, and what the courts had done in various 
cases which had been taken up through the courts, and so forth and so on. 
After holding a few hearings, he would call the committee together, they would 
go over the data, and they would draft a tentative bill which they thought 
would meet such problems as had developed. Those tentative bills would be 
sent out to the various labor organizations, to the various manufacturers' as- 
sociations, and to the various individuals who might be interested in the sub- 
ject, and suggestions, criticisms, and the like were asked for. That was not 
only confined to our State, but it was sent all over the country ; and, when 
sufficient information had been gathered to warrant a further hearing, a new 
bill would be drafted, and so on. For two years that was the course which 
the tentative bills had to pursue. The result was the workmen's compensation 
act, such as we have in the State of Wisconsin. 

Now, in the meantime, the bureau of labor had endeavored to solve the acci- 
dent problem, so far as possible, in another way. We called a meeting of the 
representatives of the State federation of labor, representatives of the State 
manufacturers' association, and representatives of insurance companies doing 
business in Wisconsin, who were inspecting factories and insuring employees 
against liability for damages, and the like. We drafted something like * 300 
rules of safety to be followed which we thought we might put into operation, 
b'ut we found that something was lacking. In the first place, I do not believe 
the employers of our State realized the situation. They did not realize the num- 
ber of accidents that \vere happening; and, in the second place, the old law 
stood in our way. The old law, or the theory on which we had gone in legis- 
lating against accidents, was the enumeration of dangerous points and places. 
For instance, we started out with a law on safety. It ran something like this, 
that all set screws, bull wheels, flywheels, tumbling rods, belts, etc., must be 
securely guarded. The legislature would, from year to year, add some other 
term to that law, and finally, I presume, it gave up in despair of keeping up 
with dangerous points that were being brought into existence by our modern 
industrial developments, so it added the phrase " and all other dangerous 
machinery " to cover everything that might be considered dangerous. But the 
courts have held that such a phrase as that must be interpreted in the light of 
what has been said preceding in the law, and in two or three States I think it 
has been said that a buzz saw, for instance, was not a machine similar to a 
bull wheel, flywheel, or tumbling rod, consequently the term " all other danger- 
ous machinery " did not apply to it. So we started out in the year 1911 with 
a different theory of safety. 

We did not repeal all our safety laws, but we did say in the law that all 
places of employment must be made safe, and the law defined the word safety 
as meaning such freedom from danger to life, health, and welfare of employees 
as the nature of the business would reasonably permit. It provided that the 
Industrial Commission should make an inquiry into industrial conditions to 
determine what places of employment were not safe, and to issue such orders as 
might be necessary to make them safe. Jn other words, it provided that the 
Industrial Commission should determine the fact of safety and order that con- 
ditions, be made as safe as the nature of the business would permit. It also 


provided that we might appoint advisory committees to help us work out the 
problem of safety, and any other problem that came under the law. The first 
thing that we believed to be necessary was to secure the services of some one 
who had done a great work in the line of safety. We searched the country 
over, from Maine to California, to find out what some large institution had 
done in promoting the welfare and safety of their employees, and started him 
out on our inquiry. We did this, and the next step was to appoint our advisory 
committee. We asked the State federation of labor to recommend to us two 
persons to serve on that committee; we asked the Manufacturers' Association 
of the City of Milwaukee to recommend two of their members ; we asked the 
State manufacturers' association to recommend to us two of their members to 
serve on the committee. The Industrial Commission then took two men that 
had done considerable w T ork in safety lines in two of the largest factories in 
Wisconsin to represent it on the committee. In the meantime, a mutual insur- 
ance company under the workmen's compensation act had been organized in the 
State, and we placed a representative of that company on this committee, and 
we started them to work in the city of Milwaukee. 

The first meeting they had they did not get very far. The manufacturers 
would sit on one side of the table and the representatives of labor on the other 
side, and anything that was proposed by one the other would say could not 
be done " You can not do this " or " You can not do that " or " You can not 
do anything." The second meeting they did not get any further. The third 
meeting they got down to discussing one or two concrete rules, but nothing 
was done further than that. At the fourth meeting I believe they began the 
adoption of rules, and perhaps got seven or eight passed unanimously by the 
committee; and I remember they came to the rule requiring a safety governor 
on an elevator that traveled so many feet. The tentative rule as worked out 
by the secretary of that committee provided that a governor shall be on all 
elevators that traveled 15 feet or more. The employers, and one of them in 
particular, began to object, saying, " We could not do that ; there is no 
necessity for it, and no sense in it," etc. The question was raised as to 
what other States were doing, and, as far as we could find out, other States 
that had adopted any laws on that subject required a governor on all ele- 
vators traveling 25 feet or more. Well, the employers felt that they might 
adopt that rule, inasmuch as other States had established a 25-foot limit, but 
they did not think Wisconsin ought to go any further. Some one said Chicago 
had adopted a rule requiring governors on elevators which traveled 20 feet, 
and some thought they ought to go as far as the rest had gone. One of the 
manufacturers who afterwards confessed to the commission that he had sought 
appointments of this advisory committee for the purpose of seeing that noth- 
ing was done, weighed about 300 pounds ; and he sat over at the middle of the 
table, and he had not taken part in any of the discussion at all ; and when 
they were about to vote on the 20-foot limit he said, " Well, boys, if you are 
going to drop me, don't let it be over 15 feet." And from that time on the 
committee never had any further trouble in adopting rules. In fact, the em- 
ployers on that committee we had to hold back many times to see that they 
did not go too far. 

When I say too far I mean this: I had been at the head of the department 
long enough so that I knew there were some things we could do and some 
things we could not do ; and there was not any sense in that committee adopt- 
ing rules so stringent that the Industrial Commission could not enforce them. 
So we had more trouble in holding back some of those employers on that com- 
mittee and keeping them from going too far than we had to get them to go 
far enough. There was never any question from that time on as to what that 
committee would do. We just had a case recently where the First National 
Bank of Milwaukee had appealed to the commission to set aside an order 
on an elevator. The bank is an absolutely fireproof building; I do not be- 
lieve there is a stick of wood in it anywhere. Our rules require that elevators 
built after a certain date should have a fireproof inclosure from the bottom 
to the top. When you come to consider that it is a national bank, the largest, 
perhaps, in the State, composed of men who are powerful, measured by wealth, 
at any rate, one would naturally suppose they would have some influence on 
that larger committee in getting that order set aside; but they insisted that 
that order must be carried out regardless of influences that were being brought 
to bear. , 

So it has occurred to us many times that much of the trouble that arises 
between employers and employees could be thrashed out and settled between 


the employers and employees could they sit down to a table together and talk 
over their differences and look over one another's problems as they are. At 
least that is what we have found to be true in the State of Wisconsin. 

Now, the principal trouble with the old law was its inflexibility. The law 
required a fire escape, for instance, on a building whether it was absolutely 
fireproof or whether it was a frame structure that would catch fire and burn 
up in 15 minutes. It required the same fire escapes on a building which had 10 
or more employees that it required on a building which had 10.000 employees. 
The same was true with all of our safety legislation. The fact that a set screw 
killed 25 men in the State of Wisconsin does not mean that all set screws are 
dangerous, for instance. I remember one time we ordered a fire escape on a 
building which contained 800 people, a frame building. There was a building 
across the street that had about the same number of people which was built 
as nearly fireproof as a building could be made. We were not inclined to order 
a fire escape on the fireproof building, at least until we had brought those frame 
buildings up to a higher standing. But when the inspector went to issue the 
order the owner said, "All right, I will build it, but you will have to order one 
on my neighbor's building across the way." The inspector replied, " But that 
building does not need a fire escape." " I do not care ; the law says it must 
be done, and if you do not do it I will have you up for malfeasance in office." 
And so the only thing to do was to order them on both of those buildings. That 
created many times an unnecessary hardship. Now, our law as it is to-day is 
more flexible. If we find, for instance, that an order does not apply, one of 
our rules requires the counterweights on elevators shall be securely guarded, 
so that in case the wire should break and the counterweights should fall and 
a man should have his arm or something in such a position that the counter- 
weight would come down and shear his arm off, the instrument would be 
guarded. But we find many times that there is not enough room b'etween the 
counterweight and the elevator in order to guard it. So the commission has the 
power on appeal to it, setting forth the facts, to set aside that order as not 
applying to such and such elevator, and then issue a new order which will make 
the counterweights safe. Under the old law, and under most safety laws, I 
think, that is an impossibility. 

Now, a few days ago I began to look over our accident records to see what 
has been some of the results and to see w r hether we were getting anywhere 
under our present system any more than we were under the old. We were 
never able to get a complete list of accidents ; \ve do not know how many acci- 
dents were happening in the State prior to the adoption of this law, nor do 
we know to-day exactly how many, because every little while we learn of an 
accident that has not been reported. But under the system a few years ago 
we had reported 14,000 industrial accidents a year in the State of Wisconsin, 
14,000 industrial accidents for the year 1908. Under the same system of re- 
porting accidents for the year 1912, there were 8,000 accidents, which seemed 
to indicate that we had at least made a reduction of 50 per cent, or nearly 50 
per cent. There were 271 fatal accidents in the year 1908, and under the same 
system of reporting accidents in 1912 there were 112, which meant more than 
50 per cent reduction. Since the year 1912, or during the last 16 or 17 months, 
the accident curve seems to be running along about the same, which would 
seem to show that we had made about as great a reduction in accidents by 
safeguarding machinery at dangerous places as it is possible to make. 

There has also been another movement started in the State, which seems to 
be doing more toward the prevention of accidents than all the safeguarding of 
dangerous machines and appliances that we have been able to do in Wisconsin. 
A year ago there were five large companies in Wisconsin 

The CHAIKMAN. Excuse me, Mr. Beck, but what was that reduction I did 
not get it. 

Mr. BECK. From 14,000 to 8,000. You will understand, Mr. Walsh, that we 
never had a very perfect system of reporting accidents; but under the same 
system of reporting accidents we had reduced the accidents from 14,000 to about 

About a year and a half ago we had five of the large companies organize 
safety departments in their establishments, a department that was kept as 
separate and distinct a department as the purchasing department or the sales 
department. They put the best men they could find at the head of those de- 
partments, and one of them made a reduction in a year of 75 per cent in their 
accidents. The five reduced the time lost from 10,000 days to 4,000 days. Now, 
figuring it up at the average rate of wages paid in th Stale of Wisconsin, it 


meant a saving of $18,000 to those companies, or 6 per cent interest on $300,000, 
which perhaps means that there is more money, when you come to figure this 
matter from the point of view of dollars and cents, as many of them do, and 
no better investment could be made than was made in that line. It cost those 
live establishments nearly $12,000 to do the safeguarding which they did, and 
during the first year they saved $18,000 in the loss of time and wages. One of 
those five establishments made an increase, and we began to make inquiry as 
to why that had occurred, and as near as we could find out, we do know that 
up until last March they had made a great decrease in the number of accidents, 
but a relative of the chief owner of the establishment wanted a job, and he had 
no other way of getting it, so the little doctor who was at the head of the safety 
department of that establishment was turned out and this fellow put in his 
place, and their safety organization fell to pieces. 

Now, I believe that this is true in Wisconsin, as a result of the work that 
has been done, and I am led to believe that that is true from a great many 
letters that we get, one of which was received just a few days ago. A smoke- 
stack had blown down in an establishment in the city of Milwaukee which 
employed about 400 girls. It happened at the dinner hour. This employer 
wrote to the commission and said : " I think the Industrial Commission should 
adopt an order on the safety of smokestacks. Our smokestack blew down in 
the high wind on a certain date, and if the girls had not happened at that hour 
to be at dinner it probably would have killed 75 of them." There were 75 
girls working at the string of machines along the edge of the factory, and the 
smokestack blew down lengthwise the whole length of that string, and there 
were about 140 girls working on those machines, and he figured from the dam- 
age that it did that it would have killed about 75. That is something we never 
used to receive under the old system. Employers are continually calling our 
attention to these accidents, and saying, " You should adopt a rule ; if you had 
adopted a rule on such and such a case I would not have had one of my em- 
ployees lose his hand," or something of that nature. And it occurs to me we 
might perhaps get along very well in the State of Wisconsin without any safety 
laws from this time on. I am pretty sure we could if it was not for about 
5 per cent of the employers of the State who do not yet seein to understand 
the problem and how it ought to be worked out. 

I believe Mr. Price will go over the educational part of our work, but if 
there are any questions you would like to ask, Mr. Chairman, which I can 
answer before yielding the floor to him, I would be glad to answer them. 

Commissioner O'CONNELL. What have you to suggest to this commission? 
You have told us now what you have done in Wisconsin. What do you sug- 
gest to this commission? 

Mr. BECK. I looked over your law coming down here. I think any problem 
that you are trying to solve, the best way which would occur to nie to solve it 
would be to follow something along the line that we have done. We know it 
has worked in Wisconsin, and I can not see why it could not work elsewhere. 
In whatever problems you take up, get those people who are interested in them 
together to thrash them out among themselves under your guidance. 

The CHAIRMAN. Are there any other questions that the commission would 
like to ask Mr. Beck? 

Commissioner BALLARD. Would that be a national law? Would that inter- 
fere with the State law? 

Mr. BECK. Of course, a national law would supersede any State law. I do 
not know that I would favor a national law that would supersede a State law, 
because I think that the National Government ordinarily is a little too far 
away from the places where these problems ordinarily arise. 

Commissioner O'CONNELL. The law of the National Government would only 
apply to the District or to the Territories. 

Mr. BECK. I think this commission would perform a considerable service by 
working out something for the State to pattern after. 

Commissioner O'CONNELL. Your idea would be that this commission might 
work out a law to put into effect by the Government, so far as it can, as a 
criterion for the States to follow? 

Commissioner GARRETSON. In this phase of the attitude of the employment 
which you referred to, as evidenced by what took place after the falling of 
the stack, as your experience indicated that the changed attitude of the em- 
ployers may have been owing to the enactment of other laws, like compensa- 
tion laws, that have shifted the economic proposition from one side to the other. 

Mr. BECK. There is no doubt about the influence Hint that has had. At the 
same time, I think that the employer has largely lost sight of just what is hap- 


pening in his factory, because he has gone clear out at the top, and he deals 
with his superintendents, and the superintendents deal with the foremen, and 
the foremen with the men, and I think he has gotten away from as close con- 
tact. The natural trend of industrial development tends to that thing. I know 
we have one employer in our State who has 375 people in a carriage factory ; he 
used to be on our board of arbitration. He would frequently come in and talk 
that very problem with me. He would say, " I do not know that I should follow 
up my present action if I had eight or ten thousand people working under me ; 
1 presume not." But he makes it a business to know his men personally, and he 
will go in and say, " Good morning, John," and so-and-so, and " How is the baby 
to-day?" and he keeps in close touch. So he knows his entire problem. I do 
think that some of our employers have got beyond that so far that they lose 
sight of it, and when their attention has been called to it by these laws I do 
think, in most of them there is a humane element in it which comes into 

Commissioner GAEEETSON. In other words, the humane element always enters 
in where the personal contact comes in and does not where the personal contact 
does not exist. 

Mr. BECK. Yes. 

Commissioner GAEEETSON. To many employers, then, the idea is that they are 
so many units, instead of so many humans? 

Mr. BECK. Yes. 

Commissioner WEINSTOCK. So we gather from what you have said that in 
Wisconsin the Industrial Commission have one set of inspectors, the State 
another set of inspectors, and the manufacturers' association another set? 

Mr. BECK. That is true in every Etate. 

Commissioner WEINSTOCK. You have various inspectors, then, representing 
different elements? 

Mr. BECK. Yes. 

Commissioner WEINSTOCK. Is there not friction between these different in- 
spectors ? 

Mr. BECK. There is, except where a standard has been established. 

Commissioner WEINSTOCK. I see. Has the State power to enforce the stand- 
ards established? 

Mr. BECK. Yes. 

Commissioner WEINSTOCK. Can your industrial board have a manufacturer 
penalized if he does not comply with the standard? 

Mr. BECK. Oh, yes. 

Commissioner WEINSTOCK. What is the penalty? 

Mr. BECK. $10 a day forfeiture. 

Commissioner WEINSTOCK. But that can only be done, I suppose, by bringing 
the manufacturer into court? 

Mr. BECK. Yes. 

The CHAIRMAN. Has the Supreme Court decided they could do that? Have 
they decided they have that power to assess that penalty ? 

Mr. BECK. Yes. 

Commissioner WEINSTOCK. That is, the industrial board assesses the penalty? 

Mr. BECK. No ; it is a court proceeding. 

Commissioner WEINSTOCK. The industrial board simply has the delinquents 
brought into court, and the court passes judgment? 
' Mr. BECK. Yes. 

Commissioner WEINSTOCK. I gathered from the experience in other States, 
from talking with insurance men, that there is frequently a good deal of diffi- 
culty where they have two or more sets of inspectors, that one inspector will 
give instructions along certain lines, and then another State inspector, perhaps, 
will follow him and give a contrary instruction, and the manufacturer is at sea 
and does not know whom to obey. 

Mr. BECK. I do not think it arises so much out of giving contrary instruc- 
tions as it does from the fact that the State has never been able to cover more 
than a small percentage of the danger points in a law. Our law simply pro- 
vided, as I enumerated before, and I think this is the exact language of our 
safety law which existed, and I think we had about as good a law as any of 
the States, that all bull wlieels, flywheels, tumbling rods, belts, and all other 
dangerous machinery should be securely guarded. Now, when you come to 
consider that the supreme courts have held that " all other dangerous ma- 
chinery " means such machinery as has been enumerated in the law; in other 
w r ords, that phrase must be interpreted by taking the whole section into con- 


sideration, and " all other dangerous machinery '' means similar machinery to 
flywheels, bull wheels, tumbling rods, and so forth. 

The insurance inspector will come in and find a hundred things that the 
law does not touch, and he will insist that those dangerous points must be 
guarded, because it is to the advantage of the insurance company to have 
every dangerous point guarded, so he is insisting on more than the factory 
inspector can insist upon. I think there is where the chief difficulty has arisen, 
but that has been eliminated in our State, and I will say that we are prepar- 
ing now to accept we do find employers objecting to so much inspection. 
They say here comes the fire inspector, and here comes the insurance in- 
spector, and here comes the city inspector and the State inspector ; we are 
simply inspected, to death. They are coming, I think, more and more to look 
at it from the point of view that the more inspection they have the better. 
It costs us nothing to be inspected, they say, and we want our place safe, 
and it is all right. But there are a good many who are. objecting to it still. 
We had a meeting on the 4th of December and had all the insurance inspectors 
doing business in the State brought together, and a second meeting wilt be 
held on the 13th of January, where we shall accept the inspection reports of 
bona fide insurance inspectors and use our inspectors to check up their work 
very largely. 

Commissioner WEINSTOCK. Would you advise the State, as the result of 
your experience, against officially appointing the inspectors of the insurance 
companies to pass upon a certain standard? 

Mr. BECK. Yes. 

Commissioner WEINSTOCK. You would not advise that? 

Mr. BECK. No. 

Commissioner WEINSTOCK. What would be the objection? 

Mr. BECK. You are then assuming responsibility for the acts of a private 
individual, and I do not think you can do that. Our experience has been 
such that we would not do that. We have that problem up there now, and I 
think we can. make the insurance companies see that it is not a thing for the 
State officials to give authority to a private individual, something that does 
not owe any official relation to the parties interested. 

Commissioner WEINSTOCK. Where the demands of the insurance inspector 
conflict with the demands of the State inspector, what would be done? 

Mr. BECK. There is no necessity for that, if the State establishes the 

Commissioner WEINSTGCK. How does the State establish the standard in 
Wisconsin? Arbitrarily, or do you bring the manufacturers together and make 
the standard? 

Mr. BECK. This committee of laboring men and employers work it out. 

Commissioner WEINSTOCK. And the State simply enforces it? 

Mr. BECK. Yes. 

Commissioner WEINSTOCK. Subject to approval? 

Mr. BECK. Of course it is really law when we adopt it. 

Commissioner WEINSTOCK. Is the State of Wisconsin in the accident insurance 
business has it an insurance department? 

Mr. BECK. No. 

Commissioner WEINSTOCK. All the casualty insurance or industrial insurance 
is conducted by stock companies? 

Mr. BECK. Or mutual companies. 

Commissioner WEINSTOCK. Yes. 

Mr. BECK. We have two very large mutual companies. We have not gone 
into the State insurance proposition yet, because we have so many instances 
where employers tell us that never before have they been able to keep in such 
close touch with their employees as they have since the enactment of this law, 
where they can sit right down with the employees and figure out between the 
two just what is coming to him, and pay it over. But it used to be a great 

Commissioner WEINSTOCK. Do they do that where they carry insurance? 

Mr. BECK. Yes. 

Commissioner WEINSTOCK. Or does this settlement come in between the in- 
surance company and the employer? 

Mr. BECK. No ; the most of the insurance companies say if he loses so much 
time pay it over to him and we will reimburse you. 

Commissioner O'CONNELL. How large a factory have you in Wisconsin? 


Mr. BECK. The Allis-Chalmers Co. have something like 10,000 men that is, 
their maximum and ordinarily about 6,000. 

Commissioner O'CONNELL. It is about 3,000 now? 

Mr. BECK. No ; I met the general manager the other clay, and they have about 

The CHAIRMAN. You spoke of an organization of Mr. Price and others being 
connected with this work. What is the name of the organization on safety 
and sanitation which you referred to? 

Mr. BECK. That relates to shop organizations for safety. We are now carry- 
ing on a campaign in Wisconsin in which we are bringing the employers to 
adopt safety appliances in their shops. 

The CHAIKMAN. But what is the name of that general organization? 

Mr. BECK. They simply call it a safety organization; it is the shop matter. 

The CHAIRMAN. But is there not some general organization which is pro- 
moting that in the State of Wisconsin and elsewhere? 

Mr. BECK. That is our industrial commission which is promoting it. 

The CHAIRMAN. There is no organization outside of your industrial commis- 

Mr. BECK. No. 

Commissioner GAERETSON. And that safety organization only exists at present 
in the State of Wisconsin? 

Mr. BECK. No. 

Commissioner GARRETSON. Or is it national in its scope? 

Mr. BECK. So far as the State of Wisconsin is concerned, it only exists in our 
State, and we are developing that by the industrial commission. 

Commissioner GARRETSON. The gentlemen who represent that here are all 
from the State of Wisconsin, are they? 

Mr. BECK. The gentlemen that we have doing that in the State of Wisconsin 
for the industrial commission are a part of the industrial commission. 

Commissioner WEINSTOCK. Does the Industrial Commission of Wisconsin have 
a safety department provided by law? 

Mr. BECK. Surely. 

Commissioner WEINSTOCK. With a proper head to it and proper officers? 

Mr. BECK. The industrial commission, of course, has the workmen's com- 
pensation to administer ; it has all of the safety laws of the State to administer, 
and then there are certain economic investigations that are required, both by 
the legislature and by the commission, in order to perform some of the duties 
that it has to perform. So we have ordinarily divided the work up among the 
three commissioners. One makes it his special duty to look after the work- 
men's compensation side of it, and another the economic investigations to be 
made, and the third the safety work of the State. 

I was down to Racine just a while ago at the organization of one of these 
safety meetings for the G. I. Case Thrashing Machine Co. They have about 
8,000 employees. At a banquet the various foremen of the various departments 
were there, and they formed their safety committee that evening, and this 
watch charm was one of the things they handed out to each one of the 250 or 
275 men they had there, and they handed me one, and I put it on. All the 
employees were given one that evening. It is not a movement, so far as we 
are concerned, outside of the industrial commission. 

The CHAIRMAN. Mr. C. W. Price, assistant to the Industrial Commission of 
Wisconsin, is the next speaker. 


Mr. PRICE. Mr. Chairman and members of the commission, my superior, Mr. 
Beck, has spoken especially of the powers and work of the commission along 
the line of drafting standards covering the equipment of plants with safe- 
guards. I am to speak especially of another duty and another power of the 
commission, which means this: The commission is not only empowered, but it 
is obligated to place in the hands of the manufacturers, the best information 
that it can gather from the experience of the companies that have done good 
work along the line of preventing accidents and making their plants sanitary 
and healthful. 

In thinking over what I should say to-day, I have been afraid of talking too 
much and burdening you with too many details. I have tried to get the chair- 
man to tell me what to do, but he will not, and Prof. Commons will not, and 


so I am going to use my judgment, and I am going to try to put myself in 
your place and suppose I had heard what Mr. Beck had said, and that I was 
not familiar with the details in Wisconsin, and supposing I had heard him say 
here is a unique departure from what other States have done, and we have 
accomplished these results of less accidents and wonderful cooperation with 
manufacturers, and it seems to me I would go out of the room entirely un- 
satisfied and unconvinced if some of the more important factors which have 
entered into this work were not touched upon, which would explain to my 
mind how it all came about that the manufacturers have changed their at- 
titude, and are now giving us cooperation. That is one of the first questions 
which people put to us when they come over to Wisconsin and see what we are 
doing: "How do you get the cooperation of manufacturers?" 

The educational work is, to my mind, one of the chief factors which has 
entered into this work. About two years ago we began to organize an 
exhibit including 1,200 photographs gathered from the companies all over 
the United States who had done the very best work in reducing accidents. 
We had three of those exhibits in duplicate, and had them mounted with 
the cards colored, and we made a tour of the State, spending a week in each 
principal manufacturing town where over 1,000 men were employed in fac- 
tories. Our deputies were expected to call on the manufacturers personally 
and interest them in having their superintendents and foremen visit the ex- 
hibit, which they did in large numbers, and in some towns hundreds of people 
besides the representatives of the manufacturers visited them, and they made 
a careful study of this exhibit of the practical results of the companies which 
had delivered the goods. This is no theory, but here are the facts in con- 
crete form in large factories. 

We not only did that, but on one evening of the week one of the commis- 
sioners and myself would hold a meeting, attended by the superintendents 
and foremen and manufacturers themselves, and we would go over the whole 
proposition of the prevention of accidents, placing before them somewhat in 
detail just how these large companies that had made reductions of from 25 
to 75 per cent had accomplished it. 

I remember one manufacturer met me on the train and he said to me, 
" Price, do you know T that meeting at Janesville did more to convince the 
manufacturers at Janesville and my superintendents and foremen that you 
people at Madison are getting down to hammer and tacks, and are going 
to work this out along the line of experience and not theory, and along the 
line of good business organization than anything else, and if it did not do 
anything else, it certainly did do that." But in addition to that it gave those 
superintendents and foremen, probably not 1 per cent of whom had had a chance 
to see very much along the line of efficient safety work before that time, 
just what could be accomplished. 

The second thing we are now doing, and I think it is one of the most impor- 
tant things, is in the line of placing practical information in the hands of manu- 
facturers and their men, and it is to publish each month what we call a shop 
bulletin, which I consider one of the most valuable things that the commission 
is doing, absolutely. That little shop bulletin is a convenient medium which 
enables the commission each month to place in the hands of the foremen and 
superintendnets and owners of the business, not what the commission thinks, 
but what has actually been the experience of manufacturers along the line 
of preventing accidents. 

Here, for instance, is one of them. We usually have a special subject, and this 
is upon eye injuries. On this page we give some figures in regard to what the 
Fairbanks-Morse people have done in reducing accidents 72 per cent. Here are 
six accidents that might have been prevented. How did they happen? What 
was the disability? \Vhat might have been done to prevent them? That 
always interests the foreman. I found in talking to organizations of fore- 
men, and I have talked to 150 organizations perhaps in the last year and a half, 
what they are especially interested in is what the other fellow is doing, not 
what I think, but what the other fellow is doing. What they want is experi- 
ence, and I have found the thing that convinces a superintendent or foreman 
is what the other fellow is doing. That is the line we are working on. Not 
only do we include those accidents, but we always include a very brief study 
on two pages of some particular line of accidents. For instance, this hap- 
pens to be eye injuries. There they have got the experience of 5,000 plants 
in Wisconsin on that subject boiled down in a nutshell, not only as to how 
they happened, but as to what may have been done to prevent them. Then 


we include cuts of guards, the most efficient that have been worked out, 
and we have made a wide study of that and searched for the best, not what 
I think or the commission thinks, but what these companies have found to 
be valuable. We are sending a hundred copies of this to some factories. 

Commissioner LENNOX. Please see that the commission is put on the mailing 
list for about a dozen of them. 

Mr. PRICE. Good ; fine. 

Commissioner WEINSTOCK. Will you put the California Industrial Commis- 
sion on your list? 

Mr. PEICE. They are already on. 

About a year ago we made a careful study of shredder accidents especially, 
not of farm machinery accidents. I mention this in passing, because we do 
not want to forget the farmers here. We canvassed the whole situation, and 
I personally visited 19 men who had their hands or arms off, and got their 
stories, and we published a little farm bulletin telling those 19 stories, and 
then giving the suggestions of a number of farmers of great experience, and 
then the suggestions of the shredder companies and the machinery companies, 
as to how those accidents may be prevented. 

Commissioner WEINSTOCK. Are the farmers in Wisconsin under the com- 
pensation law? 

Mr. BECK. No; they are not; but there is a special law on the subject 
of shredders and some other farm machinery accidents. 

Commissioner WEINSTOCK. Do you have compulsory compensation in Wiscon- 
sin, or is it voluntary? 

Mr. BECK. Practically compulsory. 

Commissioner WEINSTOCK. But the farmers are exempt? 

Mr. BECK Yes. 

Mr. PRICE. Speaking of bulletins, I do not want to forget to mention another 
class of bulletins. 

Practically all of the factories in the United States are working in ttie dark 
in the mornings and evenings of short winter days and on cloudy days. Strange 
to say there has been practically no information stating in good barnyard 
English, so that an ordinary man could read it and understand it, how shops 
could be lighted. There has been no standard set. Mr. Schwartz, who is con- 
nected with a company that has done the best piece of shop lighting, has pre- 
pared a bulletin on illumination; not a technically complete one, but just a 
practical bulletin, containing a statement of what he has found to be most 
efficient, and, of course, he has checked his own experience with the experience 
of other people. That bulletin is now in the press and will soon be issued. It 
is one of the most important bulletins that the commission will issue. 

We are also going to prepare a bulletin on ventilation and exhaustion. At 
the present time there is practically nothing on that subject. We are having 
these bulletins prepared by men who have delivered the goods ; not by men 
who have theories on the subject, but by men who have produced results, 
and they are worded, not in technical language, but in the good ordinary 
garden variety of English, so that anybody can understand it ; and I predict 
that that bulletin will do more to put light into the factories of Wisconsin 
than anything else. The standard that is recommended there is in line with 
exactly what the best factories are now doing. Just what any practical, effi- 
cient man to whom you might go would say to you if you should ask him. We 
have had so many demands for it that we have had to send out carbon copies 
to companies that wanted it before we could get it printed. 

The thing I want to point out especially is this, which Mr. Beck has just 
hinted at. I think he said it, or at least he ought to have said, that a large 
percentage of the accidents can not be prevented by guards. In the five years' 
experience we have had, during which time efficient and rigorous work has 
been done along the line of promoting safety in a businesslike and organized 
way instead of the sporadic way in which we used to do it it has developed 
put of that experience that at least some 50 to 75 per cent of the serious 
injuries and deaths can be prevented. Tluit sounds like a strange statement, 
but our experience in Wisconsin confirms that, and I think that every man in 
this room who is posted on safety will confirm it. I know that the best safety 
men do confirm it. In our State a hundred or more companies have demon- 
strated absolutely that at least 50 per cent can be eliminated. But I have made 
a careful canvass of most of the companies, and practically all of them agree that 
two-thirds of the accidents can not be reached by guards. Practically no manu- 
facturer appreciates that when he starts out. I think most of the laboring 


people have no conception of that fact. Let me ask you to look for just a 
moment at this blue print, which represents 7,908 accidents in 13 months in the 
State of Wisconsin. Here you have 5,000 plants, and if you will draw a line 
down through there you will find that there were only 2,511 accidents that hap- 
pened on machines and machine parts. Out of the 7,908 accidents, 5,400 hap- 
pened through falls, slips, stumblings, handling tools, and our old friend the 
enemy with which we are all familiar. I do not mean to say that none of them 
could be reached by guards, but a great majority can not be touched by any 
mechanical guard. 

The commission has found itself squarely face to face with that situation. 
If that is true, then the commission could not in any way cover the situation 
if it confined itself, as in the old days, to the simple inspecting of factories, the 
recommending of efficient guards, and so forth. That is, when the commission 
had gone its limit, when it had done its best in the way of factory inspection, 
the recommending of guards, and so forth, then two-thirds of the evil remained 
untouched. In covering the remaining two-thirds I think we have done the 
most interesting and most important thing that we have done at all. We are 
conducting a campaign of education. We have our deputies thoroughly trained 
along the line of safety organization. We spent a year in educating our depu- 
ties in the very best work that had been done; for instance, in the Illinois 
Steel Co., which will be represented before you by Mr. Chandler, and the work 
that had been done by the United States Steel Corporation, the Harvester Co., 
and so forth, in first-hand observation of the very best methods which have 
been adopted. The commission says to those deputies, " You can go into a plant, 
and you can find every setscrew and recommend every possible guard, and you 
can make an absolutely complete report, but you have absolutely failed if 
you leave that factory without giving the man who runs that factory an intelli- 
gent idea of safety, so that he appreciates the value of it and appreciates the 
important factors in it, and leave him with a good taste in his mouth, so that 
he is really interested in the subject of safety." We tell them that if they fail 
in that, they have failed. That is the thing that Mr. Beck has hammered into 
them over and over again, and every one of our deputies has it thoroughly in 
mind that the important thing is to get that manufacturer intelligently in- 
terested in safety and intelligently instructed in regard to how accidents have 
been prevented. 

During the last year I have been calling personally upon the large companies. 
I have nearly finished that work in Wisconsin. In telling about this I shall 
have to use the first person, because that is the only w r ay I can talk about it. 
I have usually met the manager, the president or vice president, the man at 
the top, and I have generally placed before him this blue print and a state- 
ment of the experience of the companies that have made the largest reductions 
in accidents. I have told him what our investigation has revealed. I show 
him by this blue print how accidents happen in Wisconsin. I endeavor to con- 
vince him that not more than one-third of them can be prevented by guards, 
and then I outline to him what we mean by a safety organization, which Mr. 
Beck has spoken of here. I am going to take a minute to outline for the benefit 
of this commission what we mean by safety organization, because you can not 
appreciate what we are doing unless you know what that means. I can state 
it very briefly. 

Let me say in the first place that at the beginning practically none of the 
plants in Wisconsin had any systematic way of taking care of safety. It was 
nobody's business, and, of course, nobody did it. But this idea of safety or- 
ganization is not new. It is in line with business organizations absolutely, 
and it is simply attending to safety in a systematic, thoroughgoing way, with 
some backbone and pepper, getting things done in the same way as production. 
Here is a simple outline of the way to reach results I mean to reach the work- 
men and poor men in such a way as to keep up their interest. 

First, appoint a safety committee of five high-grade men, with the superin- 
tendent as chairman, and one man, whom you might call the safety inspector, 
to be secretary, to attend to matters of detail. 

Second, every foreman inspect his department, say, once a week and make 
a written report to the committee, in which he says "Everything is all right," 
or " The following things must be done." 

Third, a foremen's meeting place once a month, at which the superintendent 
presides, and at 'which meeting the accidents that have happened arc discussed 
and the experience of other companies is considered and the problems connected 
with safety are talked over. Those meetings are the most valuable part of 


the organization in keeping your foremen interested and lined up. The super- 
intendent can do more in 30 minutes by getting his men into a room together 
than he can do in a month visiting them separately. Our failure has been that 
we have not been keeping up the interest. As Mr. Search said to me the other 
day, " We wake up for a few days and build a few guards, and then sleep for 
six months, and then w r ake up again when the inspector comes." 

The next point is a most important one, and practically every company that 
has made large reductions in its accidents has adopted this plan. In each de- 
partment where there is hazard they appoint three rank-and-file workmen, 
sometimes the humblest men, and those workmen make an inspection of that 
department, absolutely untrammeled and \vith perfect freedom in fact, being 
encouraged to present every possible point and make a written report to their 
foreman once a month. The foreman checks off the things which he himself can 
remedy and only the important things go up to the central committee. Those 
workmen at once take a new interest. They learn what you can not tell them, 
what that blue print reveals, but you can not tell them, which they think is 
buncombe. They not only inspect, but they investigate accidents, and they 
become the best instructors in that plant. The J. I. Case people experienced a 
most remarkable awakening on safety in their organization in just four weeks' 
time, and they had been running on dead for years. Mr. Montgomery testified 
that that awakening was almost wholly due to the fact that they gave their 
workmen something to do, whereas heretofore safety had been the boss's job. 
That has been our failure, gentlemen, in that we have not reached the work- 
man because we have not given him something to do. We have not recognized 
him. We have really placed no confidence in him in the matter of safety. The 
whole policy has too long been one of secrecy and therefore of failure so far 
as safety was concerned. The thing to do is to turn over a new leaf and take 
the workman into your confidence on the deal and give him confidence and 
responsibility. This is a very radical departure, and in every case where it 
has been tried it has succeeded remarkably well. 

Mr. Beck has indicated one or two results, and I want to speak of just a few 
to confirm what he has said. This is so new that I can only give you tentative 
figures, but I want to give you one or two. We took 15 companies that had 
organized, most of them recently, and we added up the days they had reported 
lost on account of accidents in the months of July and August, 1912, and the 
months of July and August, 1913, and to our amazement it showed that they 
had lost 40 per cent less days in 1913 during those two months than in the 
corresponding two months in 1912. We have had companies that reduced their 
accidents over 50 per cent in the first month. For instance, the Kimberly & 
Clark Co., at Neenah, were among the most conservative people on safety. 
They would not build guards. They have now got an organization at their 
Neenah plant, and during September, October, and November they had only two 
accidents, whereas before they had an average of 10 and 12. It so happened 
that 5 out of the 6 plants got into the game and organized safety committees, 
but the Kimberly plant, which was the most perfectly equipped physically, did 
not appoint a safety committee, and in the time referred to the Kimberly plant 
had more accidents than all the other plants put together. That company has 
issued one of the finest safety bulletins I know of, which goes to every workman 
every month. 

I could tell dozens of stories like that. Now, a plan must have something in 
it when it appeals to manufacturers and to workmen in the way this does 
appeal to them and when it gets those results. 

We have simply put this thing to them as a business proposition. I never 
tell the manager of a company that it is wrong to kill his men. I would not 
insult him by such a statement as that. I put it up to him as a fair business 
proposition, and I want to say to you that the future of safety is absolutely sure 
in the United States. Why? Because we have gone far enough during the 
last five years to have demonstrated absolutely, beyond the shadow of a doubt, 
what can be done, and we have demonstrated the fact that it turns out to be 
mighty good business organization. That explains the very marvelous develop- 
ment of the safety movement. Ladies and gentlemen, I thank you. 

Commissioner GARRETSON. Let me ask you right there : In the State of Wiscon- 
sin, where you possibly have gone further in safety than anywhere else, would 
you ever have attained what you have attained without the compensation act 
going with it? 

38819 16 19 


Mr. PRICE. Pardon me. It would have gone slower; but I have seen just as 
good results in States where they had no such help at all, with individual 

Commissioner GARRETSON. Ah, yes. 

Mr. PRICE. When they once get the idea 

Commissioner GAEEETSON. I grant you that, but I am speaking of it as a 
general proposition. 

Mr. PRICE. Unquestionably that has helped in the matter of time, but I have 
such confidence in this thing being fundamentally right that I believe it would 
have come in time anyhow. 

Commissioner GARKETSON. I noticed in the statement of Mr. Beck that the 
work of the Wisconsin commission was divided ; that one commissioner has 
charge of safety and another commissioner has charge of compensation, and so 
on, but I wish you would tell, if you can, what percentage of the money now 
paid out by the employers under the Wisconsin act reaches the injured man. 
If you can not state it exactly, I wish you would state it approximately. Can 
you state that? 

Mr. BECK. No ; I know about how much the injured men are getting, and 
I know what the insurance cost in 1912. 

Commissioner GAEKETSON. I did not know but you were able to give some 
fairly accurate figures. 

Mr. BECK. The employers of our State for the year ending December 31, 
1912, paid $1,025,000 to insurance companies for protection against accidents. 

Commissioner GARRETSON. Can you tell how much money reached the men? 

Mr. BECK. I will have to illustrate that in this way : We know how many acci- 
dents there were in the State and how much time they lost, and we know what 
they would have received had they all been under the act, as they practically 
all are now. You see our liability law was changed, so that they had to make 
the election to stay out from under the act rather than elect to come under 
the act? 

Commissioner GAEEETSON. In other words, if they stood pat they were under 
the act? 

Mr. BECK. Yes. Also we abolished all the defenses in the last legislature, 
which has practically put all the industrial workers of the State under the act. 
Now, had that condition existed a year ago, basing the calculation upon the 
average amount paid to each employee as a result of his accidents and the time 
lie lost, they would have got about $750,000. 

Commissioner WEINSTOCK. About 75 per cent? 

Mr. BECK. Yes; something like that. 

Commissioner GARRETSON. Whereas under the old liability conditions the 
proportion would have been just about reversed? 

Mr. BECK. Yes; just about. 

Commissioner GARRETSON. All the indications have shown that ordinarily 
about 34 per cent of the amount got to the injured man? 

Mr. BECK. Our investigation of that subject in 1908 indicated that only about 
25 per cent of the amount paid out by the employer got to the injured man. 

Commissioner GAREETSON. I was giving the top limit. Thirty-four per cent 
is the maximum that any tribunal has brought out as the number of cents 
out of a dollar reaching the injured man. I did not know but that your expe- 
rience might show in some concrete form what percentage now reaches the 

Mr. BECK. I think it does, when you come to consider it for all of them. 

Commissioner GAERETSON. That 75 per cent, figured in a rough way, brings it 
almost up to the result reached under the German Government administration. 
I thing it costs about 32 per cent there. 

Commissioner COMMONS. Eighty-five per cent goes to the injured man in 

Commissioner GARRETSON. They are getting better, then. The last time I 
went into it the cost was something like 32 per cent. 

Commissioner WEIN STOCK. In the State of Washington the State has a mo- 
nopoly of accident insurance. Private companies have been driven out. 

Commission GARRETSON. I know that. 

Commissioner WEINSTOCK. One hundred per cent of the amount paid by em- 
ployers goes into the pockets of the injured workmen. The cost of operation 
is paid out of a separate fund by the State and it costs about 8 per cent. 

Commissioner GARRETSON. That is even better than I am doing under our 
system, where the injured workman gets 973 P^i' cent. 


Commissioner WEIN STOCK. From your knowledge of conditions and possi- 
bilities, Mr. Price, what would you suggest that this commission do along 
the lines of safety? What can we do that will be effective and efficient, and 
how ought we to do it? 

Mr. PEICE. I should say two things: First, to make an investigation which 
will enable you to recommend governmental bodies that may do what the in- 
dustrial commission has done for the working people and manufacturers of 
Wisconsin, bodies national or State. 

I meant to say this further thing, and I forgot it : I happened to be con- 
nected with the Harvester Co. during all the pioneer days of our safety work, 
and I know of the large expenditure of money and time to which we were put 
in order to get information. It was a very difficult thing for us to get reliable 
information. Do you not see the need of some way of placing this information 
in the hands of manufacturers and helping them. Most of them can not afford 
them. The large companies can. The large companies have been the first in 
the field. The small companies have been lagging behind. 

Commissioner- WEINSTOCK. Let me see if I catch your idea clearly. It is 
that this commission should recommend to the Federal Government the estab- 
lishment of a sort of clearing house of information. 

Mr. PEICE. That would be one thing. You possibly might recommend ways 
and means by which the State Department could be made more efficient, and so 

Commissioner WEINSTOCK. If we had a separate department to gather that 
information and redistribute it to all 

Mr. PRICE. Personally I should be in favor of a central body. 

Commissioner WEIN STOCK. A clearing house. 

Mr. PEICE. To put it in a general way, governmental bodies which would in 
some practical way place information in the hands of manufacturers. 

Second, I think it will serve a very valuable purpose, and I hope my friend 
Campbell will bring it out strongly. I think, friends, that here is an oppor- 
tunity to place -before the people the facts in the case. Most manufacturers 
and workmen do not know the facts in the case. They do not know what has 
l>een accomplished ; and they do not know how it has been accomplished. I go 
to manufacturers every day who do not dream of what has been accomplished, 
because it is so recent. Think of the service this commission could perform if 
they could put up in a dignified way not in so voluminous a form as to hide it 
away in a great big black-bound volume, but make it simple so that it will 
reach the foremen and superintendents and managers so that they will read 
it, a statement of the real situation with regard to the prevention of acci- 
dents; a statement gathered from the experience of the companies that have 
actually delivered the goods. If that can be done, it would have a tremendous 

Commissioner WEINSTOCK. You must bear in mind that the powers of this 
commission are limited. All that we can do is to recommend to Congress. We 
have no power to go out beyond that. 

Mr. PEICE. I grant you that; but you could report the situation. You could 
say, " This is the situation in regard to accidents. This is what has been done. 
This is what has been found to be the cause of accidents, and these are the 
methods that have been adopted for their prevention." A dignified, complete 
report, putting it up to them, just as we have had to put it up to each manager 
in Wisconsin, showing the real situation, would do a great deal of good. I am 
going to say, friends, that it usually takes 20 minutes to convince a manager as 
a business proposition. The facts are so convincing that I can say that inside 
of a year practically every large company in Wisconsin will have a safety organ- 
ization, which means that the commission will be out of business. I mean that 
they may make better inspections and that they will do more than we can pos- 
sibly do with our deputies ; and where they have an efficient organization they 
have practically eliminated the necessity for any State inspection. Not only do 
they inspect the guards but they go infinitely further and interest the men and 
get everybody lined up. That includes about 60 per cent of the manufacturers 
of Wisconsin who are now organized. That includes the most important class in 
the State, and so we have in sight that degree of success which justifies the 
statement I have made. We have been able to show them that there is some- 
thing tangible in that thing as a business proposition. 

Commissioner WEINSTOCK. In other words, it will follow that after you have 
completely succeeded you will have eliminated your whole department ? 


Mr. PEICE. It will go out of business. I will repeat to you that in many con- 
cerns in Wisconsin we are practically out of business, and we know we are out. 
We are calling off our deputies. We go and give a little advice now and then on 
some technical point, but we can not begin to do the inspection that they do. 
AVe could not do one-fourth of it. 

The CHAIRMAN. Do you mean that you are out of business to the extent that 
a system of complete reports would show that the accidents are nil or reduced 
to a minimum? 

Mr. PRICE. It is a marvelous reduction, and we find that these people are 
attending to that part of their business better than we could. 

Commissioner BALLAED. You say that only one-third of the accidents occur 
because of defective machinery, and that the other two-thirds occur probably 
because of the workmen's own personal carelessness? Is that what we are to 
understand ? 

Mr. PRICE. Not always his carelessness. Many times his ignorance, and many 
times the inevitable hazard. 

Commissioner BALLARD. How do you reach those two- thirds? Is it by reach- 
ing the men, or by the safety organization? 

Mr. PRICE. It is through that safety organization that the man is reached. 
Why? Because he is given an opportunity to do something, and is given an 
opportunity to learn. 

Commissioner BALLARD. And in that way the accidents are very largely elimi- 
nated, are they? 

Mr. PRICE. It is the only way to reach them. I do not want to go too far, 
Mr. Chairman, and you may call me down whenever I talk too much. \Ve find 
that from 90 to 95 per cent of the suggestions made by the workmen are 
adopted by the company. The assistant general manager of the Northwestern 
Railroad told me the other day that they had received over 6,000 suggestions 
from the workmen, and that all but 186 had been adopted by the company. 
That is a little better than the showing of most of the companies, but the show- 
ing is that 90 to 95 per cent of the suggestions offered by the workmen have been 
adopted. It is perfectly surprising what those workmen will suggest. These 
suggestions are along the lines of the careless practice of piling material, or 
carelessness in regard to the use of guards, ragged clothing, boards with nails 
in them sticking up left on the floor. After you have equipped your whole 
plant to the limit, after everything has been done which you can suggest, you 
will find your men making suggestions, and they will come in every industry. 

Commissioner WEIN STOCK. You may have touched upon it before, but if you 
have it has slipped my mind. When you go to a plant that has taken no steps 
in the direction of safety, exactly what is your method of approaching that 
plant to get it organized, to show that there is something practical about it? 

Mr. PRICE. I am glad you asked me that question, because it gives me a 
chance to make a point that I should like to make. We have in mind one thing, 
that unless we get the man at the top, the man with the money, it is hopeless. 
We have seen it tried. W T e have converted the superintendent, and he tried to 
organize, and he failed; why? Every foreman, every man down the line, knew 
that the boss was not there. We tried to convert him to the economic side of it 
first. It took me six months to get one of the most stubborn men in Wis- 
consin, and when we finally got him he broke loose and there was no limit to 
it, when we showed him the economic side. 

The second thing is to have a meeting of foremen. Mr. Beck has spoken of 
the banquet at the J. I. Case Co. We have had banquets all over the State at 
foremen's meetings. At these banquets the owner of the business many times 
presides, and he puts himself on record in regard to what he wants and says, 
" (icntlemen, I have been investigating this subject. The experience of others 
has been called to my attention, and I am convinced that we have got to do 
thus and so in order to reduce accidents. I am convinced that we have not 
gone far enough. We have got to go beyond guards." Do you know that in 
every case where the boss has sa* at the head of the table, when he has said, 
" Gentlemen, this is what we are going to do," the result has been manifested 
in the greater interest which has been taken by everyone connected with the 
enterprise. I remember that Mr. Simmons, of the Simmons Manufacturing Co., 
made about five speeches during the evening. Finally he said, "Boys, to- 
morrow morning at 7 o'clock the first order of business is going to be safety, 
and the second is going to be production." They got results immediately, and 
in every case where they have got the foremen together, and the man at the 


top. has put himself on record, the results which have been obtained have been 
surprisingly good. 

Commissioner GAEKETSON. Let me ask you right there : You have just made a 
phrase that suggests the thought, safety first and productivity afterwards. 
Have you had any opportunity in a plant where it has been minimized prac- 
tically to this personal equation point, to the point of human error, have you 
had any opportunity to study the effect of speeding up, from the material 

Mr. PRICE. My judgment would be that with the increase of speed you in- 
crease the hazard, not only because of the quick motions 

Commissioner GAERETSON. I mean whenever you pass the ordinary limit of 

Mr. PRICE. Not only because of the quick motion, which admits of a slip, 
but because of a certain psychological effect 

Commissioner GAREETSON. A result of the concentration of the mind? 

Mr. PRICE. For instance, when a man on a punch press puts in 18,000 pieces 
a day. In the afternoon about 3 o'clock he gets so dead that then is the time 
when he makes a miss. 

Commissioner GARRETSON. He becomes merely automatic in his motions? 

Mr. PRICE. Yes. 

Commissioner WEINSTOCK. Have you any data to show the percentage in 
establishments where efficiency systems have been put in operation as compared 
with plants where they have not? 

Mr. PRICE. We have not. 

Commissioner WEINSTOCK. Would not that be of interest? 

Mr. PRICE. Very great interest. 

Commissioner WEINSTOCK. As demonstrating the pros and cons? 

Mr. PRICE. Yes. I was closely associated with the plants of the Harvester 
Co., and in one of their plants that employed 1,300 men they reduced their 
accidents over 50 per cent the first year, and at once it resulted in a cleaner 
and more orderly factory. At once it resulted in a more efficient manufactur- 
ing organization. I never heard of a plant where that result did not follow 
safety organization. I never heard of a superintendent who did not believe 
that he had a better manufacturing organization after his plant was or- 
ganized. It always results in the foremen cleaning up their departments. For 
instance, in the Allis-Chalmers plant the first month after they perfected their 
safety organization they cleaned up and put a broad, red line about 4 inches 
wide to define the aisles, and that was the dead line over which they must not 
place any material. In the Harvester Co., in the Champion works especially, 
they raised the standard of the factory inside of a year, and it was noticeable 
in the increased cleanliness and orderliness of everything. It had that result, 
in addit'on to the reduction of the number of accidents. 

I meant to say one another thing which slipped my mind entirely, but probably 
you have it in mind. In addition to the inspection and investigation of acci- 
dents, and thereby getting experience and information, great emphasis has been 
placed on the value of instructing the workman carefully in regard to the 
hazard of his job, especially the new man, and particularly the non-English- 
speaking man. The Steel Corporation has had that problem perhaps as much 
as anyone, and there they have emphasized that very strongly. I think the 
chairman of our commission will give details in regard to what has been done 
there. The plan has been adopted of personally instructing the man from the 
very first five minutes in regard to what the company is doing and getting the 
workman to do, and in showing the man the dangers of his job. 

The CHAIRMAN. Have you been able to get any statistics to show how a 
safety organization affects production in these plants? 

Mr. PRICE. It always makes for efficiency. 

The CHAIRMAN. Do you mean increased production? 

Mr. PRICE. Yes; I mean exactly that. 

Commissioner WEINSTOCK. Are those things which you have stated the only 
two i lungs which are essential to organize a plant: First, to get the man at 
the top converted to the economic side, and, secondly, have a meeting of 
foremen and a banquet? 

Mr. PRICE. Outlining what I have called safety organization in my experi- 

The CHAIRMAN. Are there copies of your blue print which you can give to 
the commission V 


Mr. PRICE. You can have all you want. I think we sent copies to you, but I 
am not sure. We are going to place in the possession of every man here every- 
thing that we have in the way of information. 


The CHAIBMAN. Mr. Campbell, we will be glad to hear from you. 

Mr. CAMPBELL. I do not know how much time you propose giving me. 

The CHAIRMAN. We have placed no limit on it. We simply depend upon 
you gentlemen, each one of you having heard the other, not to duplicate, but 
to give us what you think you can right upon the question as to what this com- 
mission can do under the law on the question of safety and sanitation. I think 
that is the idea. 

Mr. CAMPBELL. It has occurred to me, Mr. Chairman and members of the 
commission, that in order to get at the problem that confronts the commission 
it might be advisable for some of us who have had something to do with the 
working out of the problem in recent years to place before your minds and 
within your view that which has been done, the development that has taken 
place, and with that idea in view I have aimed to frame my remarks. If that 
does not meet the pleasure of the commission, I shall be glad to have you say 
so now, and I will talk along other lines that will suit your pleasure better. 
But it seems to me that you gentlemen who probably have not been familiar 
with the work of the movement as it is on foot to-day that you probably would 
like to have a little analysis of it put before you. Therefore in order properly 
to understand what the accident-prevention problem is I will say that it is 
first essential to understand what the kinds of accidents are. 

In speaking of accident-prevention work let me say, by way of parenthesis, 
that I think we who are dealing with the problem I think the gentlemen in 
Wisconsin include that include as well the allied subjects of sanitation and 
general matters relating to betterment of conditions, personal conditions of the 
men, you might say, which affect their working ability. In other words, all of 
the interrelated items, such as sanitation and betterment of working conditions 
of all kinds, are included. 

Accidents divide themselves into two general classes the nonpreventable or 
the so-called trade risks and the preventable accidents. I believe, and I think 
others agree with me, that the nonpreventable accidents amount to about 10 
per cent of the number of accidents in the most hazardous of trades and run 
down to a very small fraction of 1 per cent in the less hazardous occupation, 
leaving 90 per cent of the accidents that occur in the country as preventable 
accidents. This can lead to but one conclusion that if 90 per cent of the 
accidents are preventable we ought to get busy and prevent them. I venture to 
quote to you the old worn out figures that have been used so many times during 
the past few months, showing the number of accidents that, even in the face 
of what has been done, are occurring in our country to-day. Our statistics 
are not reliable. There are 35,000 men killed in the industries of our Nation 
to-day and 2,000,000 injured every year. I will not make the divisions and 
subdivisions by days and hours, but you can see that it is an appalling indict- 
ment upon the lethargy and indifference of the powers that be and of the men 
themselves to find that awful list of casualties occurring every year, and it 
therefore means that something must be done. Something has been done, but 
the bark has only been scratched as yet. 

What are the causes of these 2,000,000 injuries and 35,000 deaths? To get 
at the problem we should analyse it from that point of view first. 

The causes are first the failure of the employer to provide and maintain 
proper working conditions, proper and efficient safeguards on dangerous ma- 
chines or appliances, and, secondly, the ignorance or carelessness of the men 
themselves. There are two broad divisions the duty of the employer and 
the duty of the employee. 

That in a broad way presents what the accident prevention problem of to-day 
is and how it should be mot. The first duty should be met by the employer 
assuming the obligation that falls to him naturally of providing proper working 
places and proper and efficient safeguards on dangerous machinery and ap- 
pliances ; and secondly, the duty of the men to assume their obligations; of 
carefulness on their part. And in this second element there i